North Korea Faces Allegations of Creating And Selling Illegal Casino Sites

Data from South Korea’s National Intelligence Service has reported that North Korea is developing illegal online casinos and selling them. According to the intel, a criminal organization from South Korea rented them and generated billions of pounds in profits. 

The Criminal Organization is Tied to the Worker’s Party Office 39

South Korea’s INS reports that the criminal organization goes by the name Gyeongheung and it’s related to North Korea’s Office 39 from the Worker’s Party. There’s no official information on what’s Office 39’s duty, but intelligence states that this is where all the most influential political figures in North Korea exchange gifts that vary from cash to expensive alcohol and cars. 

INS states that Gyeongheung is most likely based in Dandong, a coastal city in the Liaoning province in China. It goes on to say that the location is highly strategic because this is where North Koreans can work in China and thus, avoid any sanctions by the UN. 

In 2017, the UN sanctioned North Korea and forbade its citizens from working in China. However, the operatives create false identities and can cross the border and work there. The sanctions were an effort by the UN to cut North Korea’s ability to fund its nuclear power program. 

Local media reports that the South Korean criminal organization pays around £5,000 per website, per month. Then, it pays another £3,000 for its continued support and maintenance. In return, these websites are believed to generate billions of pounds in profit. Estimates suggest that so far, several thousand of these websites have been created. 

Thefts Don’t Include Money Only

Apart from stealing billions, illegal gambling sites also steal personal information from their users. They use auto-play malware to do so and intel states that more than 1,000 pieces of information have been stolen from South Korean citizens only. The criminal organization then tried to sell this information and make extra profit from it. 

These activities are not new to North Korea. In fact, the country is known to make money from various illegal actions, even though the country has been sanctioned countless times. The country has blocked almost all types of import and export of goods and has very limited channels through which it can make money. 

So, the leaders often lean towards criminal solutions. These include drug trafficking, illegal gambling rings and even crypto fraud. At the end of 2023, a study by Recorded Future’s Insikt Group showed that North Korea could have amassed over £3 billion in crypto fraud, half of which was stolen in 2022 alone. 

The money is reportedly used to fuel nuclear weapon development. Stolen identities are either being sold for profit or used to bypass KYC and AML verification procedures. Not only did the operatives target individuals, but they also attacked companies dealing with cryptocurrencies and venture capital firms. The report also notes that cyberattacks and online fraud may account for up to 50% of the weapons program in the country.