The U.S. Departments of State, the Treasury and Homeland Security and the Federal Bureau of Investigation issued a joint advisory (the Advisory) on April 15, 2020, discussing the threat to the international community posed by cyberattacks linked to the Democratic People’s Republic of Korea (North Korea), in particular highlighting concerns for the financial services sector. North Korea has been subjected to comprehensive international sanctions implemented to pressure its government to denuclearize. The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has implemented additional unilateral sanctions in response to other North Korean activities, including cyberattacks, human rights violations and money laundering. In addition to broad prohibitions on trade with North Korea, U.S. sanctions bar domestic financial institutions from conducting or facilitating any significant transaction in connection with trade with North Korea or on behalf of any person whose property has been blocked under executive orders imposing sanctions on North Korea. Foreign financial institutions risk secondary sanctions for engaging in the same.1
As a result, North Korea has increasingly used cybercrime, such as ransomware attacks, to raise funds to support its weapons of mass destruction and ballistic missile programs. Recent examples of cyberattacks attributed to North Korea include WannaCry 2.0, a 2017 ransomware cyberattack that infected hundreds of thousands of computers and IT resources in over 150 countries, and the Digital Currency Exchange Hack, a hack into a digital currency exchange that stole approximately $250 million worth of digital currency. These incidents, and other similar digital attacks, victimized institutions and individuals alike with monetary losses, data loss or corruption as well as system downtime that can have a cascading effect to operations, productivity, profits and market reputation.
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