Investigation Shows Hackers Moved Stolen Cryptocurrency to Asian Payments Platform – CryptoCurrencyWire

A major payment company in Cambodia has been implicated in receiving more than $150,000 worth of cryptocurrency from a digital wallet associated with the North Korean hacking group Lazarus, according to blockchain data, highlighting the criminal group’s methods of laundering money in Southeast Asia.

Huione Pay, headquartered in Phnom Penh and specializing in remittance services, currency exchange, and payments, received the funds between June 2023 and February 2024. The funds were transferred from an unidentified digital wallet linked to Lazarus, which, according to blockchain analysts, had previously deposited money obtained through phishing scams from three cryptocurrency companies in June and July of 2023.

Lazarus allegedly stole more than $160 million from cryptocurrency businesses Alphapo, a Saint Vincent and Grenadines-based company, and Atomic Wallet and CoinsPaid, two Estonia-based companies, according to an FBI report from last year. These robberies were part of a string of thefts linked to Lazarus, which U.S. officials believe finance North Korea’s nuclear weapons projects.

According to the United Nations, North Korea can purchase products and services that are prohibited by international sanctions through the use of cryptocurrencies to get around those restrictions.

Huione Pay stated that the company was unaware it had received money indirectly from these hacks, attributing its lack of knowledge to the high number of transactions that occurred between the hack’s source and its wallet. The company also said that the wallet used to send the funds wasn’t under its control.

Despite the difficulty of controlling transactions from external wallets, blockchain analysis techniques can help companies identify risky wallets to prevent interactions with them, according to crypto security experts.

Huione Pay declined to comment on its compliance standards or explain why it accepted payments from the questionable wallet.

Cambodia’s national bank — NBC — stated that platforms such as Huione are prohibited from dealing with digital assets and cryptos, citing the 2018 ban intended to protect investors from losses due to cybercrime, cryptocurrency volatility and the anonymity that could lead to money laundering and terrorism financing. Although it did not say what steps it would take, NBC hinted that it would take corrective action against Huione.

Despite crypto’s anonymous nature and its operation outside the traditional banking system, transactions are traceable on the blockchain, a public ledger recording the movement and timing of crypto transfers. U.S.-based blockchain analysis company, TRM Labs, confirmed that Huione Pay was one of several platforms that received the majority of the stolen crypto from the hack.

TRM Labs further explained that the hackers changed the stolen cryptocurrency through a complex laundering process into different cryptos, including tether, which maintains a steady value in the U.S. dollar. They used the Tron blockchain for tether transactions, known for its speed and low cost.

The wider crypto community, including leading entities such as Riot Blockchain Inc. (NASDAQ: RIOT), is likely to tighten its customer information systems in order to proactively weed out those suspected of possible money laundering or other illegal activities before the authorities step in and subject the firms to enforcement measures.

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