It may surprise you to learn that North Korean hackers were responsible for a third of this theft – $1 billion – according to Chainalysis, far surpassing the $400 million they stole across seven cyberattacks on crypto exchanges in 2021.
But why is North Korea, of all places, diving into digital assets?
It all boils down to choice – of a lack of it.
Wild swings in the price of bitcoin and other cryptocurrencies make them a poor store of value and a terrible medium of exchange.
But what if you have few choices, like El Salvador? The country had long abandoned its own fiat currency – the colón – and legally adopted the US dollar before it decided to give bitcoin the same status last year. Here’s how that experiment is going, by the way. (TL;DR: not great.)
And what of North Korea, a brutal dictatorship run by a crime family that threatens the world with nuclear armageddon while starving its own people for decades?
Years of crippling economic sanctions and pressure from governments in the neighbourhood (mainly China) have forced North Korea to come up with creative ways to bypass these economic punishments.
Of the most successful of these has been – you guessed it – crypto hacks.
North Korean hackers have sent crypto worth around $52.46 million to exchanges in South Korea since 2019 in an effort to evade sanctions or launder money, according to the Chainalysis report, which also caught the attention of South Korean lawmaker Yoon Han-hong this week.
Chainalysis, which has worked with the US Federal Bureau of Investigation (FBI) and Europol to track the criminal use of crypto, said it arrived at the figure by tracing several intermediary deposit addresses that have been exposed to crypto wallets owned by North Korean hackers.
So what is the impoverished, pariah nation with a GDP of just $18 billion in 2019 doing with its new-found crypto riches?
Building a nuclear arsenal, of course.
Reuters reported in February, citing an excerpt of a confidential United Nations report, that “cyberattacks, particularly on cryptocurrency assets, remain an important revenue source” for North Korea, and that independent sanctions monitors said they had received information that North Korean hackers continued to target financial institutions, crypto firms and exchanges.
Crypto may be in the throes of a crippling bear market but – as the latest numbers show – that hasn’t dented North Korea’s crypto ambitions, since it directly funds the one thing keeping the Kim family in power.
Written by Zaheer Merchant in Mumbai
IT Earnings Reckoner
All major IT services firms except Tech Mahindra announced their second-quarter results for FY23 this week. While most reported steady growth numbers in Q2, they all pointed to changes they were seeing in the sector owing to macroeconomic headwinds and fears of an impending recession in developed nations.
Interestingly, moonlighting was a subject of discussion in our conversations with several CXOs. They agreed that the new phenomenon indeed presented a challenge, and most termed it ‘unethical’.
Here are some of the top stories from this week’s IT earnings:
More Layoffs at Edtechs
The edtech sector was back in the news this week with two major players – Byju’s and FrontRow – announcing mass layoffs as they look to restructure their operations and achieve profitability.
Byju’s said it would sack 5% of its 50,000-strong workforce – about 2,500 employees – in what will be one of the largest rounds of layoffs by any Indian startup. FrontRow said it fired 130 employees (almost 75% of its workforce), across marketing, sales, engineering, and product, in what was its second round of layoffs this year.
Meanwhile Vendantu, another troubled edtech startup, acquired Deeksha – a test preparation platform for board and competitive exams – for $40 million.
The successive layoffs in the edtech sector reflect the overall doldrums within the Indian startup ecosystem. Recently, we reported that late-stage startups such as Udaan and PharmEasy are resorting to debt instruments such as convertible notes to tide over the economic whiplash. Convertible notes convert into equity at a later date and require no valuation to be ascribed to the startup.
Here are the important edtech stories from this week:
ET Ecommerce Index
We’ve launched three indices – ET Ecommerce, ET Ecommerce Profitable, and ET Ecommerce Non-Profitable – to track the performance of recently listed tech firms. Here’s how they’ve fared so far.
Tech Policy Roundup
The Personal Data Protection (PDP) Bill has been doing the rounds for quite some time now, after the government scrapped the previous version earlier this year.
In an exclusive interview, Rajeev Chandrasekhar, minister of state for electronics and IT, told us the revised version of the (PDP bill is likely to contain relaxed provisions on data localisation and cross-border flow of data. This could bring relief to Big Tech and other firms, which had serious apprehensions about the previous version.
Some Big Tech firms such as Google are also facing scrutiny from the Indian government and its various agencies. India’s competition watchdog has clubbed complaints by several news organisations that allege Google has abused its dominant position in the space.
Here are the biggest tech policy stories this week:
Cab aggregators clash with K’taka govt
The Karnataka High Court, in an interim arrangement on Friday, capped the convenience fee chargeable by app-based aggregators such as Ola, Uber and Rapido for autorickshaw services in Bengaluru at 10% of fare.
This is exclusive of the goods and services tax (GST) to be collected on the total fare, as before.
The court order comes after a week of legal tussle between app-based auto-ride hailing providers and the Karnataka government after the latter ordered a probe into their inflated fares and ordered them to stop their services – calling them ‘illegal’ – within three days of the missive.
However, the ride-hailing apps refused to stop their services, and Ola and Uber instead moved the High Court to challenge the state transport department’s notice. Both companies have a licence issued under Karnataka On-Demand Transportation Technology Aggregators Rules, 2016.
Here are the developments from the ongoing legal battle:
In Other News
Amazon sues consumer protection body over fine: Amazon has filed a case against the Central Consumer Protection Authority (CCPA) in the Delhi High Court challenging an order that found the ecommerce platform violating mandatory standards with regards to sale of pressure cookers
IT firms may halve campus hiring this year: Campuses that are popular with IT services companies looking to hire engineers are likely to see the number of offers for the class of 2023 fall by as much as half, a new study by staffing services firm Xpheno suggests.
Brands cower as social media mobs run riot: Brand strategists and lawyers have seen a surge in the number of requests to review content as the boycotting of films and brands gains traction on social media. Brands are asking creatives and marketers to steer clear of religion, politics or anything that has the potential to offend.