How North Korean hackers became the world's most ruthless bank robbers

North Korea's equivalent to the CIA, the Reconnaissance General Bureau, has trained the world's best bank robbery teams. RGB hackers have targeted more than 100 banks and cryptocurrency exchanges around the world in the last three years, stealing more than $650 million. That we are aware of.

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Students at Pyongyang's famous Mangyongdae Revolutionary School. North Korea's best hackers are frequently dispatched to countries with better internet speeds in order to target banks all over the world. In the United States, they have targeted Wells Fargo, Citibank, and the New York Federal Reserve. (Image courtesy of KCNA)

It was one of the largest bank robberies in history, yet the perpetrators never even stepped foot on American territory.

They didn't even go after a regular bank. They opened an account with the Federal Reserve Bank of New York, a highly secure organisation.

The bank has the world's largest gold repository in vaults 80 feet below Manhattan's streets. Many of these gold bars belong to foreign governments, who believe they are safer storing their gold in America's well-defended bunkers than at home.

Similarly, foreign countries deposit funds with the Fed. But this is cash in the twenty-first century: all ones and zeroes, not smudgy banknotes. The bank's massive overseas fortune is stored on humming servers that are linked to the internet.

In February 2016, the crooks set out to steal roughly $1 billion from a Fed-run account. This particular account belonged to Bangladesh. After breaking into the Bangladesh Central Bank's systems, the crooks waited until Friday, a day off in many Muslim-majority countries, including Bangladesh.

They then began depleting the account.

Posing as Bangladesh Central Bank employees, the hackers emailed the Fed a flurry of bogus transfer requests totaling over $1 billion. The Fed began zapping cash into accounts maintained by the thieves overseas, the majority of whom were based in the Philippines. Much of the money was promptly cashed out or laundered through casinos.

The trail thereafter becomes desolate.

The hackers did not receive the entire billion dollars they sought. The majority of the fake requests were discovered and cancelled by suspicious workers. They did, however, end up with an incredible score of $81 million.

The perpetrators of this heist are members of one of the world's most powerful organised criminal syndicates. They don't work for the Triads, the Sinaloa Cartel, or the Cosa Nostra of Sicily. They work for the Reconnaissance General Bureau (or RGB), which is based in Pyongyang. This is North Korea's version of the CIA.

North Korea's RGB, like the CIA, is steeped in clandestine abroad plots: assassinations, abductions, and plenty of surveillance. However, it is likely best understood as a mash-up of the CIA, the KGB, and the Yakuza.

What sets the bureau apart is its entrepreneurial tendency, which has a decidedly criminal bent.

North Korea has been subjected to Western sanctions and has been excluded from global markets for decades. This has pushed the regime to seek money in murkier areas where the law does not apply. These black-market ventures have included heroin production, the fabrication of counterfeit $100 notes, and the counterfeiting of name-brand cigarettes.

However, hacking has far overtaken all of those rackets. The bureau has trained the world's best bank robbery teams, as well as a network of hacking units capable of carrying out major online heists.

These thugs also have one major edge over other syndicates: they are certain they will never be charged. That's what happens when your own country sponsors your criminal misbehaviour.

According to US intelligence authorities, this is a new phenomena. “A nation state plundering banks... that is significant. “This is unique,” says Richard Ledgett. He was the National Security Agency's deputy director until his recent retirement.

North Korea has undertaken attacks against more than 100 banks and internet exchanges in a total of 30 nations in recent years. The RGB appears to have succeeded in stealing $650 million. That we are aware of.

Nonetheless, they are often ignored – at least in the American media, where discourse of online deception is dominated by Russian political hacking. If you didn't know, North Korea committed a heist on the Federal Reserve in February 2016, while the media was focused on the US presidential election at the detriment of, well, practically everything else.

That focus has now shifted to North Korea, and for good cause.

Not long ago, North Korea threatened to smite the United States with its "treasured nuclear sword of justice." It now makes great gestures of affection. Kim Jong-un has freed American detainees. He has gleefully entered South Korea, if only for a little while, and is now preparing to hold peace negotiations with President Donald Trump, a man who has threatened the young autocrat's life on Twitter. (Of course, all of this might alter in an instant.) On Wednesday, North Korea's leader cancelled negotiations with South Korea over joint US-Korea military drills and threatened to cancel his meeting with Trump.)

South Korean President Moon Jae-in and North Korean leader Kim Jong-un hold hands at the Panmunjom truce village inside the demilitarised zone dividing the two Koreas, April 27, 2018, in South Korea. (Image courtesy of the Korea Summit Press Pool via Reuters.)

For the time being, Kim Jong-un and Donald Trump have agreed to meet in Singapore on June 12. This round and future rounds of discussions, if they continue without breakdown, will be centred on the fact that, against all odds, the leader of this destitute nation has obtained humanity's most potent creation: the hydrogen bomb.

We are all aware of this. Those with in-depth knowledge of North Korea's RGB, on the other hand, believe that North Korea has pulled off another astonishing technological feat: amassing one of the world's most proficient hacking syndicates.

Furthermore, these bank robberies are tied to the state's nuclear arsenal. Sanctions are imposed in response to missile tests. Sanctions deplete North Korea's foreign currency reserves. Pyongyang is then forced to seek alternative cash streams in the underworld. None of these illegal operations is as lucrative as hacking, and none offers a greater threat to the world's financial system, which is dominated by the United States.

I sought up Kim Heung-Kwang, a bespectacled 58-year-old computer expert living in Seoul, to help me make sense of North Korea's hacking exploits. Kim is familiar with the thinking of Pyongyang's tech-savvy regime servants.

He was once one of them.

Kim isn't exactly simple to find. That's how he prefers it.

Kim texts directions after agreeing to meet. My co-producer, Sona Jo, and I follow them into a drab cement facility on the outskirts of Seoul, far from the capital's glittering shopping promenades. Outside, it's snowing lightly, and the unheated building is chilly. Kim's chambers are reached through a lengthy trek up a chilly stairwell.

He answers the doorbell cheerfully — "Come in!" he says in a sing-song tone — and immediately offers a cup of green tea. On the way here, I readied myself for an unpleasant, slow-to-warm interaction. That feeling has pervaded some of my previous talks with North Korean defectors. They were, after all, raised to loathe Americans from birth.

“You are, after all, jackals!” When I inquire about his anti-American upbringing, Kim responds. He's laughing out loud with his eyes, which wrinkle as he smiles. “At least, that's what they say. Americans will always be our adversary. Bosses of a tainted empire.”

But Kim is friendly, with the manner of a gentle professor. I can't say the same for the other man in the room: a tall man in a dark coat who doesn't introduce himself but looks us over before retreating to a corner in silence. I decide not to inquire.

Kim Heung-Kwang is a computer network specialist who now leads a group of highly educated North Korean defectors. (Photo courtesy of Facebook)

Kim has come a long way since emerging from the Tumen River in 2003, terrified, drenched, and practically destitute. That year, he snuck to the banks of the river that separates his nation from China and bribed a North Korean guard. As Kim swam through frigid waters toward China, the soldier turned aside. However, as he swam, Kim claims he was fired at by a second guard whom he had failed to bribe.

He eventually made it to the other side unhurt and travelled from China to South Korea. He now leads a group of highly educated North Korean defectors.

He keeps himself occupied by leading the North Korea Intellectuals Solidarity alliance, which includes exiled North Korean lawyers, doctors, engineers, professors, and programmers. According to the information he has gathered from these associates, North Korea's hackers are "an incredible treasure to Kim Jong-un." “Because North Korean hackers are clearly the best in the world.”