Urgent Korea-US-Japan Cooperation Needed to Recover Coins Stolen from Binance

Regarding North Korea's cryptocurrency theft, an assessment has emerged that the golden window to recover the assets lost in the hack is rapidly closing. The $6.3 billion (approximately 8.4 trillion won) worth of coins taken from Binance, the world's largest cryptocurrency exchange, must be frozen and recovered before hackers convert them into cash through multiple steps. The U.S. Federal Bureau of Investigation (FBI) has identified the North Korean hacking group 'TraderTraitor' as being behind the theft, which occurred on the 29th of last month.

Ari Redbord, Global Head of Policy at global blockchain analytics firm TRM Labs, emphasized in a written interview with Yonhap News Agency on Friday (local time) that South Korea, the United States, and Japan must work together to cut off money laundering routes. "In incidents like this, speed is what matters most," he stressed, adding that "the window to freeze and recover stolen funds is measured in hours or days, not months."

Redbord gave a positive assessment of the initial response by South Korean financial authorities. He noted that the measures taken—convening major exchanges immediately after the incident to review their security status and urging caution on withdrawals—were carried out swiftly. However, he pointed out that the diplomatic response has been more cautious.

"Sanctions cannot prevent hacking itself, but they can raise the cost of cashing out stolen cryptocurrency," he advised, adding that "the most effective measure is designating over-the-counter (OTC) brokers and intermediaries who convert stolen coins into fiat currency as targets of sanctions." Sanctions, he said, are effective only when aimed at the money laundering infrastructure rather than individual hackers. He added that when designating targets, the United States and Japan should harmonize their lists and share wallet addresses and identifiers so that exchanges can verify them immediately. If such requests are not made in real time, he warned, the measures will remain merely symbolic.

There have also been calls for action against China's money laundering network, on which North Korea depends. Ari Redbord, Global Head of Policy at TRM Labs, urged diplomatic pressure on China along with measures targeting the Chinese money laundering networks North Korea relies on. He proposed indictments and subpoenas against Chinese banks used by organized crime from North Korea and China.