Hyungoo Kim tracking cryptocurrency cyber crimes

Hyungwoo Kim, CEO of Uppsala Security explained how domestic South Korean money laundering and cyber crime experts still roam free in the country using cryptocurrency.

Late last week, he stated his case at the Information Security Conference 2020. Kim is himself an expert on tracking and identifying cyber crimes and the criminals who commit them. His company, Uppsala Security, specializes in cyber security and has made discoveries about cryptocurrency crimes in the past.

Early this year, Uppsala Security discovered that the Upbit ETH hack in late 2019 saw tremendous money laundering activity between the wallets that eventually received the stolen ETH. They were able to determine this by tracking crypto wallet addresses and their transactions related to hacked, crime, and fraud.

The information they collect is stored on a database.

Kim was able to make his case for the rampant money laundering taking place in Korea by connecting two different seemingly unrelated instances. First, someone’s ETH wallet was hacked in 2018 and 973 ETH were transferred out. Some of those ETH went into the South Korean exchanges Coinone and Upbit.

Second, he explained that as he helped law enforcement discover the identities of some of the nth-room degenerates through their ETH, BTC, and Monero transactions, he found a common exchange wallet between both the first and second instances. Although seemingly unrelated, and over a year apart, the two instances are linked in that at least one of the exchange accounts was used for both crimes.

His findings in both cases were added to the Uppsala security database. The cross-referencing via database analysis showed how the cases were connected. Surely there will be more connections found that expound on a greater network of cyber crimes committed via cryptocurrency.

Cryptocurrency cyber crime and prevention

Cryptocurrency offers marvelous benefits to everyday users. It is often faster, less complicated, far cheaper, and less invasive than legacy financial institutions. It also affords a level of anonymity that traditional finance cannot. With that comes the invitation to commit crimes. Clearly in South Korea cyber criminals are taking advantage of those benefits.

Kim made a straightforward plea to the audience that as cases of cyber crimes via cryptocurrency proliferate and are exposed, countermeasures against them should evolve. On that, he noted that crowdsourcing is one of the main ways that these crimes are being committed these days. His suggestion was to identify criminal wallets and flag them so that they cannot be used in the future.

Fortunately for law enforcement, cryptocurrency cyber crimes are easy to track. Every single transaction on the Bitcoin and Ethereum blockchains are recorded and immutable, meaning they are permanent and cannot be altered. Therefore, the transaction history of every wallet, including those on exchanges, can be tracked from the instant they are created. As more information about cyber crimes is collected, the faster the public and law enforcement can react to the crimes themselves.

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