Cybergambling rakes in millions for North

North Korea is operating a lucrative gambling business in cyberspace to earn hundreds of millions of dollars, circumventing the international community’s sanctions, a security expert on the reclusive communist state said Thursday.

The North’s Reconnaissance General Bureau and IT offices are earning about 1 trillion won ($864 million) annually through illicit activities in the cyberspace, including gambling businesses, said Yoo Dong-ryol, head of the Korea Institute of Liberal Democracy. Yoo made the analysis at an annual security conference jointly hosted by the military’s Defense Security Command and Defense Security Research Institute.

“The North is operating tens of hubs in China and Southeast Asia, where crackdowns are relatively weak, to earn foreign currency,” Yoo said. “It is earning about 1 trillion won a year by developing and selling illegal gambling programs, operating gambling sites using names of foreign nationals and stealing cyber money through hacking.”

Yoo, a former senior researcher at the Korean National Police University’s Police Science Institute, said illegal gambling software programs are sold for tens of million won each and upgrade fees are also high. “The North also operates illegal gambling sites by hiring locals and split the profits six to four or half-and-half,” he said. “From each hub, the North is collecting over 10 billion won on average.”

In 2014, a group of North Koreans were arrested in Cambodia for operating an illegal gambling site. At the time, the Cambodian police confiscated about 10 billion won ($8.6 million) from them.

In 2012 and 2013, South Koreans were arrested by the Seoul police on charges of operating illegal gambling sites using North Korean programs.

Intelligence experts believe the country’s cyber operations units are all participating in the gambling industry.

“North Korean programs sold in the South were embedded with malicious code,” an intelligence official said. “Computers on which the gambling programs were downloaded were used as zombie computers for cyber attacks. The North is using the programs to earn money and for cyber terrorism, so we must be alert.”

Yoo said the North operates about 20 cyber operations units with 6,800 hackers. “About 800 were recently added. They are not only engaged in hacking activities, but also communicate with spies using social media and 160 pro-North Internet sites and manipulate public opinion.”

He said the North will try to expand its influence over the South through cyberspace. “We must create a cyber security law to establish the legal ground for online searches and seizures and revise the military criminal law to reinforce cyber security.”

BY JEONG YONG-SU [ser.myoja@joongang.co.kr]