Cryptocurrency exchange executive convicted of trading military secrets with North Korean hackers using Bitcoin

The South Korean Supreme Court recently finalized the conviction of a cryptocurrency exchange employee. The core of the case involves recruiting a military officer with top-secret clearance to trade national defense information for Bitcoin. Combining reports from South Korean media outlet Daily, the international cryptocurrency news platform PANews, and DL News, this ruling reveals an unprecedented criminal case at the intersection of national security and cryptocurrency.

Exchange Employee’s Violation of the National Security Act

South Korea’s highest judiciary confirmed a 4-year prison sentence for the exchange employee. He received approximately $487,000 worth of Bitcoin from a North Korean hacker organization and facilitated transactions with a military captain in exchange. Actual transactions showed about $33,500 worth of Bitcoin was paid.

The court determined that the exchange employee clearly violated the National Security Act, and his actions posed a direct threat to national security. This was seen as more than simple cryptocurrency trading; it was an act of collusion in leaking military secrets.

North Korean Hackers’ Sophisticated Operations

According to investigations, the North Korean hacking group devised a highly systematic plan. They instructed the exchange employee to provide hidden camera devices in the form of wristwatches and USB hacking tools to infiltrate military information systems. The goal was to gain remote access to the combined U.S.-South Korea command and control system.

Fortunately, their infiltration attempt was ultimately thwarted. The system breach attempt via the laptop the military captain intended to provide failed, and security systems detected the threat.

Legal Responsibilities of Involved Parties

The military captain involved was separately sentenced to 10 years in prison and fined for violating the Military Secret Protection Act. His actions were regarded as a serious crime that directly undermines national defense, beyond mere personal gain.

This case demonstrates how cryptocurrency can be exploited as a medium for threats to national security. It reaffirms the risk that digital assets like Bitcoin, which guarantee anonymity, could be used as a payment method for illegal transactions.