U.S. Sues to Tap Crypto Accounts Tied to North Korean Hack

(Bloomberg) -- The U.S. sued to gain control of cryptocurrency accounts North Korea allegedly used to steal more than $250 million from Bitcoin and Ether exchanges in 2018 in a move that comes as Kim Jong Un's regime launched one of its biggest military provocations in months.

The suit filed in federal court in Washington on Monday seeks the forfeiture of 113 accounts. According to the complaint, the hackers used phishing emails containing malware to target the exchanges, which were located in South Korea and elsewhere.

“The phishing campaign targeted thousands of email accounts at exchanges around the world and personal email accounts of prominent people within the cryptocurrency ecosystem, to include CEOs of major exchanges,” the U.S. said.

The government said it began looking at the alleged hacks after the United Nations Security Council found in 2019 that North Korea was using cryptocurrency hacks to finance its military and get around sanctions.

Earlier on Monday, the U.S. sanctioned two Chinese nationals who were allegedly involved in laundering the stolen money.

The sanctions haven't stopped North Korea from building its military arsenal and the Korean Central News Agency said Tuesday that Kim was on hand to guide “a firepower strike drill,” with state media releasing photos of him in a fur hat and a leather trench coat watching the exercises.

Kim's regime on Monday fired projectiles that had similar flight characteristics to short-range ballistic missiles. While the nature of the projectiles fired wasn't immediately clear, it's the first such provocation since Kim said Dec. 31 that he was no longer bound by a self-imposed freeze on major weapons tests.

North Korea Marks Year of Failed Trump Talks With Missiles (2)

Kim spent much of last year threatening to take a “new path” in nuclear talks with the U.S. in 2020, if President Donald Trump didn't make a more appealing offer in nuclear negotiations and the launch came almost a year to the day after Trump broke off a summit with Kim in Hanoi after the two reached a stalemate in their nuclear negotiations.

--With assistance from Jihye Lee and Jon Herskovitz.

To contact the reporter on this story: Erik Larson in New York at elarson4@bloomberg.net

To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Jon Herskovitz, Joe Schneider

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