TraderTraitor: The Kings of the Crypto Heist #CriptoNews

Barnhart says North Korea realized that relying on other people—such as money mules—could make their operations less effective. Instead, they could steal cryptocurrency. Two groups emerged from that tactical shift, Barnhart says, CryptoCore and TraderTraitor. “TraderTraitor is the most sophisticated of all,” he says. “And why? Because APT38 was the A team.”

Since then, TraderTraitor has been linked to multiple large-scale cryptocurrency thefts in recent years. For instance, the March 2024 theft of $308 million from Japan-based cryptocurrency company DMM has been linked to TraderTraitor by the FBI, Department of Defense, and police in Japan.

TraderTraitor typically targets people working at Web3 firms using spear-phishing messages—most often, people working on software development. “They know the individuals that work at these companies, they track them, they have profiles on them, they know which trading platforms are doing the most volume. They’re focused on that entire industry, understanding it backwards and forwards,” says Microsoft’s DeGrippo.

GitHub, which is owned by Microsoft, highlighted in July 2023 how TraderTraitor created fake accounts on the coding platform, plus LinkedIn, Slack, and Telegram. The TraderTraitor criminals can create fake personas that they use to message their targets or use real accounts that have been hacked, GitHub’s research says. In that instance, TraderTraitor invited developers to collaborate on GitHub, before ultimately infecting them with malware using malicious code. Recently, security researchers at Palo Alto Networks’ Unit 42 threat intelligence team found 50 North Korean recruiter profiles on LinkedIn and linked them back to TraderTraitor.

The group has been seen using “custom backdoors,” such as PLOTTWIST and TIEDYE, that target macOS, says Adrian Hernandez, a senior threat analyst at Google’s Threat Intelligence Group. “These are typically heavily obfuscated to prevent detection and thwart analysis,” Hernandez says. “Once UNC4899 [TraderTraitor] has gained access to valid credentials, we’ve observed this threat actor moving laterally and accessing other accounts to access hosts and systems, keeping a low profile and aiming to evade detection.”

Once the North Korean hackers have their hands on cryptocurrency or digital wallets, the money laundering often follows a similar pattern, as cryptocurrency tracing firm Elliptic outlined in a blog post breaking down the Bybit hack. To avoid having cryptocurrency wallets frozen, they quickly swap stolen tokens—which are often issued by centralized entities and can have restrictions placed upon them—for more mainstream cryptocurrency assets like ether and bitcoin that are harder to limit.

“The second step of the laundering process is to ‘layer’ the stolen funds in order to attempt to conceal the transaction trail,” Elliptic writes. This means splitting the funds into smaller amounts and sending them to multiple wallets. With Bybit, Elliptic writes, money was sent to 50 different wallets that were then emptied in the coming days. This cryptocurrency is then moved through various cryptocurrency exchanges, converted into bitcoin, and passed through crypto mixers that aim to obscure crypto transactions.

“North Korea is the most sophisticated and well-resourced launderer of crypto assets in existence, continually adapting its techniques to evade identification and seizure of stolen assets,” Elliptic says in its blog post.