How North Korea's Senior Leaders Harness the Internet

A new report sheds light on how North Korea's senior leadership is changing how it uses the Internet, which has evolved into a professional tool its leaders use to generate revenue and evade international sanctions and controls meant to block certain technologies and operations.

Recorded Future researchers have seen a 300% increase in the volume of activity to and from North Korean networks since 2017. They attribute the spike to multiple drivers: greater use of the Russian-routed TransTelekom infrastructure, use of previously unresolved North Korean IP space, and new mail servers, FTP servers, and DNS name servers to maintain higher traffic flow.

Few people in North Korea are permitted direct access to the global Internet. This research is focused on the activities of these few people, primarily government leaders and ruling elite. It's believed the observed changes in network administration over the past six months are likely in response to higher Internet demand from North Korean users both at home and abroad. An Internet-enabled mail server, for example, indicates need for people to remotely access email.

It's clear, the researchers report, that the Internet has shifted from a "fascination" or "leisure activity" to a serious revenue-generation tool. Weekdays are now the most popular time for Internet use, compared with weekends and evenings in 2017. This, combined with the 300% increase in activity and higher bandwidth, denotes greater focus on harnessing the Internet.

The regime has tried to hide its increased Internet use with operational security technologies like virtual private networks, virtual private servers, transport layer security, and the Tor browser, among others. In 2019 it introduced DNS tunneling and demonstrated just how tech-savvy North Korea's leaders are. Researchers expect they're using DNS tunneling to hide data exfiltration from target networks, and/or to evade government security controls and limits.

There are three key ways North Korea uses the Internet to bypass sanctions and generate revenue: online bank theft, cryptomining, and low-level IT and financial crime. The UN reports North Korean cyber activities have targeted financial organizations and cryptocurrency exchanges in at least 35 countries, generating up to $2 billion for the regime. Attackers have also used illegal access to the SWIFT banking network; after they gain initial entry, they execute fraudulent transactions and transfer stolen funds to dummy accounts under their control.

"We assess that these banking operations are well researched and resourced by the North Koreans," Recorded Future's Insikt group explains in a writeup of their findings. "Attackers likely spent anywhere from nine to 18 months inside of a target network conducting further reconnaissance, moving laterally, escalating privileges, studying each organization's specific SWIFT instance, and disabling security procedures."

Researchers have consistently observed small-scale Bitcoin mining as of November 2019. Monero mining, however, has increased tenfold since October 2018, when it reflected activity similar to Bitcoin's. Unlike Bitcoin, they say, Monero is truly anonymous and all transactions are encrypted so only the sender or receiver involved can find the other.

"We assess that cryptocurrencies are a valuable tool for North Korea as an independent, loosely regulated source of revenue generation, but also as a means for moving and using illicitly obtained funds," researchers say.

Learning Prohibited Skills Abroad
People who have defected from North Korea have described a process in which operators and programmers overseas earn money and send it back to the regime. Some have created counterfeit video games and developed bots to steal digital items (weapons, gear, etc.) and resell them for profit. Some sell vulnerabilities in gaming software or target online casinos. One defector said these operators were required to earn nearly $100,000 per year, with 80% sent back to North Korea.

Many defectors have also shared how North Korea exploits other countries to train and host its state-sponsored operators. People are sent to countries including China, Russia, and India so they can gain advanced cyber training. Researchers say this activity is growing harder to track as North Koreans, and all Internet users, place a greater focus on cybersecurity.

"At its most basic, North Korea has developed a model that leverages the internet as a mechanism for sanctions circumvention that is distinctive but not exceptional," researchers write. These techniques for gaining block knowledge and generating revenue can be repeated, driving concern for how the regime can serve as an example to other financially isolated countries eager to bypass their own sanctions.

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