South Korean crypto exchange operator jailed for espionage - Coinfea

South Korean authorities have sentenced a crypto exchange operator to jail for espionage. The 40-year-old exchange operator was sentenced to four years in prison after a South Korean court upheld its ruling that the accused attempted to steal military secrets for North Korea.

The cryptocurrency exchange operator working under orders from a suspected North Korean hacker, along with his military recruit, who local media reports identified simply as Mr. B, have been sentenced to prison after they received substantial amounts of Bitcoin in exchange for military intelligence.

South Korean crypto operator bags jail term for spying

The Supreme Court’s 3rd Division, led by Chief Justice Lee Sook-yeon, recently upheld the lower court’s judgment against the 40-year-old defendant, identified only as Mr. A, who violated the National Security Act by spying. According to reports, in July 2021, Mr. A received instructions through Telegram from an individual operating under the alias “Boris,” suspected of being a North Korean hacker.

Mr. A approached an active-duty military officer, Mr. B, who was 30 years old at the time, with an offer to pay in cryptocurrency in exchange for classified military information, which the court believes was at Boris’s orders. Mr. B then used sophisticated spying equipment, including a hidden camera embedded in a watch. In addition, Mr B used a USB-shaped hacking device called “Poison Tap,” designed specifically for detecting and extracting military secrets to allow hackers remote access to a laptop.

The group attempted to penetrate South Korea’s defense systems. Boris was gunning for access to the Korean Joint Command and Control System (KJCCS). Mr. B successfully obtained and provided the login details for the system to both Boris and Mr. A. However, authorities confirmed that the actual hacking attempt failed. Mr. A received Bitcoin worth approximately 700 million won ($525,000) for his role in the espionage scheme.

On the other hand, Mr. B was paid Bitcoin valued at 48 million won ($36,000). Investigators also revealed that Mr. A attempted to recruit more conspirators by approaching another active-duty officer with offers of payment in exchange for military organizational charts. However, this second officer rejected the offer. Mr. A was found guilty and given a four-year prison sentence along with a four-year suspension period.

The court emphasized that Mr. A “was at least aware of the fact that it was trying to detect military secrets for a country or group that is hostile to the Republic of Korea.” The judges said that Mr. A only cared about his economic gain while “committing a crime that could have endangered the entire Republic of Korea,” which was an offense that deserved severe punishment. Mr. B was charged with violating the Military Confidentiality Protection Act and received a harsher 10-year prison sentence. He was also hit with a 50-million-won fine from the Supreme Court.