Pyongyang has rejected FBI allegations that it was behind the theft of $6 billion (€5.3 billion) from the cryptocurrency exchange Binance, while simultaneously test-firing a strategic cruise missile fitted with a new cluster-munition warhead. The moves underscore the regime's dual strategy of denying cybercrime while showcasing its expanding military capabilities.
Kim Yo-jong, the influential sister of leader Kim Jong-un, publicly dismissed the FBI's claim as a “grave political provocation” and “absurd rhetoric and nothing new,” pointing to previous US accusations linking North Korea to last year's major hack of Bybit. The FBI had identified a North Korea-affiliated hacking group, known as TraderTraitor, as responsible for the Binance breach, which experts believe may be the largest cryptocurrency theft on record.
Michael Bosack, founding director of the Parley Policy Institute and a former UN Command official, told AFP that the stolen amount equalled “nearly a quarter of the DPRK's estimated annual GDP.” He suggested that the denial was aimed at preserving channels through which North Korea could continue to launder and use the cryptocurrency. “If external parties start closing doors based on the international heat on the matter, then the stolen cryptocurrency does nothing to support the Kim regime's near-term priorities,” he said.
The hack has prompted South Korea to call for stronger protections for its digital infrastructure. President Lee Jae-myung said that “not long ago, even the world's largest cryptocurrency exchange suffered astronomical losses from a cyberattack believed to have been carried out by a hacking group.” He added that “as hacking techniques become increasingly intelligent, sophisticated and commonplace with the development of artificial intelligence, existing security systems centred on inspections and responses after incidents have revealed clear limitations.” Lee called for a “comprehensive prevention system” to address the cybersecurity crisis.
A 2024 United Nations report noted that proceeds from North Korean cyberattacks had “reportedly helped to fund the country's development of weapons of mass destruction.” This latest incident, and the subsequent denial, highlight the ongoing challenge of holding state-sponsored cybercriminals accountable.
Missile test adds to regional tensions
Monday's missile launch, reported by the official Korean Central News Agency (KCNA) on Tuesday, involved a strategic cruise missile equipped with a new cluster-munition warhead. KCNA claimed the warhead is “capable of turning into ashes a target area of 5 to 6 hectares with its highest-density power.” The test, according to KCNA, “perfected the capability to deliver a vertical strike against the target by improving the terminal manoeuvrability of the cruise missile.”
A North Korean official was quoted as saying the test was conducted “because our armed forces should defend the security of the country and deter all sorts of threats.” Analysts see the launch as a demonstration of North Korea's ability to disable key South Korean and US military infrastructure, including airfield runways, radar bases, air defence batteries and assembled troops, with a single cruise missile. Lim Eul-chul, a professor at the Institute for Far Eastern Studies at Kyungnam University, told AFP that the test also aims to provide a “double deterrence against South Korea by strengthening conventional asymmetric strike capabilities at a stage before the use of nuclear weapons.”
The nuclear-armed North has recently tested a range of weaponry, including attack drones, a new precision-guided torpedo system and an intermediate-range hypersonic missile. Unlike ballistic missile launches, North Korean cruise missile tests are not prohibited by UN Security Council sanctions. South Korea's military did not announce the cruise missile launch, as it had also not done with Sunday's test. Asked about Sunday's reported test, Joint Chiefs of Staff spokesperson Jang Do-young said South Korea and the United States were “closely coordinating and conducting a highly detailed analysis of its characteristics and specifications.”
The developments come amid heightened tensions on the Korean peninsula, with Seoul pushing for border talks while Pyongyang continues its weapons programme. The international community, including European nations, watches closely as North Korea's actions have implications for global cybersecurity and regional stability.
