South Korean authorities confirmed that North Korean hacker groups were behind the 2019 hack of Upbit, a major cryptocurrency exchange. On November 21, the National Office of Investigation revealed that Lazarus and Andariel hacker groups stole 342,000 Ether (ETH).
The Theft and Its Aftermath
Upbit first reported the hack in November 2019. At the time, the stolen Ether was valued at $147 per coin, totaling around $50 million. However, Ether’s current price of $3,100 per coin means the stolen funds are now worth over $1 billion. The hack occurred through a breach of Upbit’s hot wallet, which continues to attract attention as the value of Ether rises.
North Korea’s Role Confirmed
The investigation has been ongoing for years, but this is the first official confirmation of North Korean involvement. Authorities traced the stolen cryptocurrency, analyzed IP addresses, and identified language patterns linked to North Korea. Additionally, the U.S. Federal Bureau of Investigation (FBI) assisted in gathering evidence.
While the authorities have confirmed North Korea’s involvement, they have not revealed the hackers’ methods. This decision aims to prevent copycat attacks.
Laundering the Stolen Funds
The attackers sold around 57% of the stolen Ether on exchanges linked to North Korean interests. They laundered the remaining funds through 51 overseas exchanges, complicating efforts to trace the assets.
Upbit Under Scrutiny for KYC Violations
In addition to the hack, Upbit faces investigation for Know Your Customer (KYC) violations. On November 14, South Korea’s Financial Intelligence Unit (FIU) flagged 600,000 potential KYC violations during a review of Upbit’s business license renewal. The exchange allegedly accepted unclear identification documents, raising concerns about proper user verification.
If confirmed, these violations could result in fines of up to $71,500 per case. They could also complicate Upbit’s license renewal, threatening its continued operation in South Korea.
What’s Next for Upbit and the Cryptocurrency Industry?
The confirmation of North Korea’s involvement in the Upbit hack marks a significant development in the global fight against cybercrime. It reveals how state-backed hackers operate and highlights the security challenges facing cryptocurrency exchanges.
As South Korean authorities continue their investigation into Upbit’s KYC violations, the cryptocurrency industry will be watching closely. With digital assets like Ether gaining in value, the pressure on exchanges to ensure security and compliance has never been higher.
I am Toby Rothschild, Co-Founder of Spearmint and author at Coinography, and a strategist focused on advancing Web3 innovation, digital ecosystems, and the future of decentralized technology. I combine product thinking, creative leadership, and deep interest in emerging trends to help shape how individuals and organizations interact with the next generation of digital systems.
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