Court records reveal detention of cryptocurrency alternative operator accused of using Bitcoin to gather intelligence for North Korea.

A South Korean cryptocurrency exchange operator has been sentenced to four years in prison after a court found them guilty of “leaking military secrets” to North Korean hackers in exchange for Bitcoin (BTC) payments.

Chosun Ilbo reported that a 42-year-old individual with the surname Lee was convicted of breaching the National Security Act.

Lee has also been barred from holding similar positions for an additional four years.

Crypto Exchange Operator: Sentenced to Four Years

The court was informed that Lee was the “operator of a crypto exchange” when they “received 700 million won [$480,000]” worth of BTC.

The funds, as stated in court, originated “from an individual believed to be a North Korean hacker.”

Seoul Central District Court. (Source: KBS News/YouTube/Screenshot)

The hacker persuaded Lee to “approach an active-duty military officer” to “leak military secrets.”

Presiding Judge Choi Kyung-seo, at a branch of the Seoul Central District Court, remarked that North Korea “has an anti-state nature.”

Choi further noted that Pyongyang “aims to undermine South Korea’s liberal democratic system.” The court elaborated:

“Lee was in pursuit of significant personal and financial gains. However, in doing so, Lee committed a crime that could have jeopardized the entirety of South Korea.”

The court heard that Lee contacted a military captain with the surname Kim at the behest of a “North Korean hacker.”

In an unprecedented incident, a court in South Korea was attacked early Sunday morning by demonstrators opposing the court’s decision to issue an official arrest warrant for President Yoon Suk Yeol over his unsuccessful martial law attempt. https://t.co/wwSfleNqxO pic.twitter.com/cGgPfQWwCy

— The Korea Herald 코리아헤럴드 (@TheKoreaHerald) January 19, 2025

The hacker, identified by the codename “Boris,” reached out to Lee via Telegram in July 2021. Boris was reportedly attempting to “recruit active-duty officers who could provide military secrets.”

Prosecutors indicated that Boris was “a member of” the 110th Research Center, a state-sponsored hacking group based in Pyongyang.

The US Treasury imposed sanctions on the group in May 2023. Seoul believes the group was responsible for the 2009 DDoS attacks on “key government agencies” including the Presidential offices and the National Assembly.

South Korea’s impeached President Yoon Suk Yeol attended a court hearing where investigators were seeking to extend his detention, making a surprise appearance following his arrest earlier this week. https://t.co/N3eLJeI8ti

— Bloomberg Asia (@BloombergAsia) January 18, 2025

Hackers Compensated in Bitcoin

The court was informed that Lee provided Kim “a watch-shaped hidden camera” to “record various confidential military documents.”

Lee also “attempted to” assist North Korean hackers by smuggling hacking software into a South Korean military base on a USB flash drive.

However, prosecutors stated that law enforcement intercepted Lee before they could deliver the USB device to Kim.

The prosecution service reported that it had traced the “source of the Bitcoin” Lee received “as payment for his actions,” which helped them “conclude that Boris was a “North Korean agent” and a member of the 110th Research Center.

Last year, a court sentenced a group of loan sharks who accepted military passwords as collateral from soldiers. The soldiers sought to borrow money to invest in cryptocurrency.

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