North Korean hackers’ meme tokens are being used to launder money stolen from Binance. The North Korean hackers used meme tokens as a way to hide the origin of the money.
How the Meme Token Laundering Scheme Operated
According to the host of Pro Blockchain Media Live, the North Korean hackers created six meme tokens, with names like ‘Pink Bow Monkey’ and ‘Elon Musk with Poster’. They didn’t create the tokens to build a community or offer utility to holders. Instead, they wanted to use the tokens as a way to funnel the stolen money through a network of wash trades. The North Korean hackers’ meme tokens were cheap to create (about 25 NIR, or $90) and were then paired with real NIR in a liquidity pool.
The North Korean hackers then conducted trades across a network of wallets. Some of their wallets would use the stolen money to buy the meme tokens, while other wallets would sell the meme tokens for NIR in the liquidity pool, thus removing ‘clean’ NIR from the pool. This would essentially launder the North Korean hackers’ funds, making it harder to trace the origin of the money.
Scale of the Operation and Its Financial Trail
The host of Pro Blockchain Media Live detailed how about 117,000 NIR ($430,000) was run through the North Korean hackers’ meme token pools. Furthermore, the trading in each of the tokens lasted less than a day. The creators of the tokens would then pull liquidity from them and abandon them. The North Korean hackers then converted their laundered funds into stablecoins and bridged them to other chains, making it even more difficult to track them down.
Additionally, a significant portion of the stolen funds (~11.8 million NIR, or $44 million) has yet to be touched. This means that the North Korean hackers might be proceeding cautiously, or might be looking to launder the stolen funds in a different way.
Implications for Crypto Security and Industry Responses
The use of the North Korean hackers’ meme tokens also highlights a trend where easily recognizable and low-effort projects are being used for financial crime. As the host of Pro Blockchain Media Live noted, meme tokens are cheap and easy to deploy, which makes them very attractive to cybercriminals looking to avoid detection.
This incident highlights just how vulnerable exchanges like Binance are and also raises concerns about the way decentralized mechanisms can be used for schemes like this. It also highlights the ongoing cat-and-mouse game between cybercriminals and blockchain investigators, who have to come up with ways to track more inventive methods of laundering stolen funds.
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