FBI Warns of North Korea Social Engineering Attacks Targeting DeFi

The FBI warns the DeFi community about North Korea growing social engineering attacks, with hacker groups like Lazarus targeting decentralized finance platforms through phishing and insider manipulation.

In a recent alert issued by the Federal Bureau of Investigation (FBI), hacker groups linked to North Korea have intensified their focus on decentralized finance (DeFi) platforms. The FBI’s warning, published on September 3, highlights the growing threat to DeFi teams and users from North Korean-backed hacking groups, such as the infamous Lazarus Group and Andariel.

The FBI points out that these hacker groups use sophisticated social engineering tactics, including phishing attempts and insider infiltration, to compromise DeFi platforms. North Korean hackers are known for conducting detailed pre-operational research, often scouting potential victims by monitoring social media activity, especially on professional networking and employment-related platforms.

According to analytics firm Chainalysis, North Korean-linked hackers were responsible for $1 billion worth of crypto heists in 2023 alone. Although the total fiat value of these hacks has dropped by 41%, the number of hacks increased to 20 in 2023, compared to 15 in 2022.

Among the most prominent North Korean hacking groups is the Lazarus Group, which has been active since 2009. Over the last decade, the group has drained billions of dollars through sophisticated attacks on DeFi platforms and central banks. Notable examples include the $100 million Harmony Bridge hack and the $81 million Central Bank of Bangladesh heist in 2016.

Most of the attacks on DeFi platforms, including recent incidents like the $63 million hack on the Ethereum Layer 2 game Munchables, have involved social engineering techniques. In the Munchables case, a malicious developer introduced a vulnerability through a contract upgrade, allowing them to seize control of up to 1 million ETH. Although the funds were eventually returned without a ransom, the attack underscores the vulnerability of DeFi platforms to insider manipulation.

In addition to DeFi-based hacks, the Lazarus Group has been tied to multiple central bank breaches. The group is notorious for its 2016 attempt to steal nearly $1 billion from the Central Bank of Bangladesh by exploiting the SWIFT network, an international payments messaging service.

Blockchain sleuth ZachXBT has connected Lazarus, also known as Bluenoroff, to at least 25 DeFi hacks totaling over $210 million between 2020 and 2023. Many of these exploits involved phishing emails used to gain access to private keys, with stolen funds often laundered through mixing services like Tornado Cash and ChipMixer.

ZachXBT also revealed that North Korean hackers build fake resumes and GitHub profiles to infiltrate DeFi projects. By using fake identities and referring one another for roles across different teams, a single hacker entity can reportedly earn between $300K and $500K per month from working at over 25 projects simultaneously.

The FBI’s warning emphasizes the importance of vigilance in the DeFi space, urging teams and users to strengthen security measures to counter these persistent and evolving threats.

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