FBI Issues Critical Alert About Bitcoin and Ethereum ETFs

The Federal Bureau of Investigation (FBI) warns companies associated with Bitcoin and Ethereum ETFs about a potential attack from North Korean hackers. 

According to a notice issued yesterday, the FBI warned that these fraudulent North Korean hackers target crypto ETF companies through sophisticated social engineering attacks. 

It revealed that North Korea’s cyber actors have been investigating these companies over the past few months, with possible plans to attack them.

North Korea’s Sophisticated Tactics 

The FBI stressed that North Korea leverages sophisticated and elusive tactics to steal digital assets from companies with large funds. 

Per the announcement, North Korea’s cyber actors use social engineering tactics, such as extensive pre-operational research and impersonation, to deceive employees into granting access to their companies’ networks. 

Furthermore, the FBI claimed that these malefactors boost their impersonation credibility using realistic imagery of individuals known to victims.

Indicators and Safety Measures 

Specific indicators of North Korea’s social engineering tactics include malicious investment offers from notable crypto companies, requests to run suspicious codes, and unsolicited job offers with unrealistic compensation. 

To prevent falling prey to scammers, the FBI advised crypto ETF-related companies to develop unique methods of verifying contacts. It also advised these firms to avoid storing crypto wallet information on devices linked to the internet.  

Additionally, the FBI shared tips to protect companies already impacted by these social engineering tactics. They include disconnecting affected devices from the internet, reporting incidents to the FBI’s complaint center, and sharing experiences with employees. 

Bitcoin and Ethereum ETFs Attract Significant Attention 

It is worth mentioning that the U.S. SEC approved multiple Bitcoin and Ethereum spot-based ETFs earlier this year. While Bitcoin spot ETFs have attracted significant investments from traditional investors, the Ethereum funds have not been impressive. 

Data from Farside Investors shows that Bitcoin ETFs have attracted $17.31 billion in inflow since their launch on January 10. Conversely, Ethereum ETFs have recorded an outflow of $524.8 million since July 23.

Notably, the outflow witnessed in the Ethereum spot ETF market stems from Grayscale’s converted Ethereum Trust ETF. Nonetheless, other Ethereum ETF issuers have registered significant inflows, attracting the attention of investors and scammers. 

Meanwhile, North Korean cyber actors have been targeting crypto exchanges in the past years. As reported earlier, North Korean hackers stole over $70 million worth of BTC, ETH, and XRP from CoinEx last year. In 2022, North Korean cyber actors also made a failed attempt to steal funds from an unidentified Israel-based exchange. 

Notably, most North Korea-related scams are carried out by popular hacking organization, the Lazarus Group.