The head of a cryptocurrency investment firm who received bitcoin from a North Korean operative and then helped extract Korea's military secrets on North Korea's orders has received a finalized sentence of four years in prison.
The Supreme Court's Third Division (Presiding Justice Oh Seok-jun) finalized the lower court's ruling on the 28th that sentenced a person surnamed Lee (42), indicted on charges of violating the National Security Act, to four years in prison and four years of disqualification, following the decision on the 20th of last month.
◇ After receiving instructions from an operative, a watch-type spy camera was also brought into a military unit
From 2013 to 2015, Lee gambled on a private sports toto site and was punished for gambling trips to casinos in the Philippines. In 2016, Lee came to know operative A of the North Korean Reconnaissance General Bureau through an online community of cryptocurrency investors, and they continued to communicate via the Telegram mobile messenger. In 2018, Lee engaged in customer-luring activities, such as sending spam messages, on an illegal online gambling site run by operative B.
In Feb. 2021, Lee founded a cryptocurrency investment company in Hanam, Gyeonggi Province. A provided Lee with cryptocurrency worth $600,000 (about 660 million won at the exchange rate at the time) as operating funds. Of the $300,000 in revenue generated from operating this cryptocurrency, A gave $270,000 (about 260 million won) to Lee. Investigators said, "Lee was financially dependent on B."
In 2018, A asked Lee to "find an active-duty soldier." Through a cousin who was a former officer, Lee obtained the contact information of active-duty officer Mr. B and passed it to A. Mr. B was serving as a company commander and had access to the "Korea Joint Command and Control System (KJCCS)." KJCCS is used to share operational situations and send and receive classified information. If hacked, it could disrupt the military command and control system.
In Apr. 2021, Mr. B accepted A's proposal to "send military secrets in exchange for cryptocurrency." In Jan. 2022, A instructed Lee to purchase a watch-type spy camera, and Lee paid cash for the device and sent it to the military apartment where Mr. B lived. Mr. B actually brought the device into the base. Using this spy camera, A could detect the file paths and security program types on the target computer, which could aid in hacking KJCCS.
In Jan.–Feb. 2022, Mr. B sent A photos of a KJCCS terminal and booting videos. A also received documents containing content related to wartime and peacetime operational plans and sent bitcoin worth about 34 million won, among other transfers, sending a total of about 48 million won in bitcoin to Mr. B. On Apr. 2, 2022, Mr. B was urgently arrested while trying to obtain documents related to the brigade's wartime operational plans.
Acting on A's instructions, Lee purchased parts needed to make hacking equipment for detecting military secrets. Lee then connected it to a laptop so A could do the coding. If this hacking device were brought into a military unit and connected to a computer, North Korean hackers could remotely steal military secrets from the computer within minutes.
In July 2021, A gave Lee a file of identity information listing the names, units, resident registration numbers, home addresses, phone numbers, and family relationships of seven officers, including active-duty Captain Mr. C, and ordered him to "secure additional information on them and recruit them."
Following this, Lee sent a message to Mr. C via Telegram, saying, "If you provide information such as the military organization chart, we will pay at least $500 and up to $1 million." Mr. C rejected the offer.
Also in May 2021, Lee approached Park Sang-hak, head of the Fighters for Free North Korea, a group that sends anti-North Korea leaflets by balloon, to collect information on North Korean defectors. Claiming to donate in bitcoin, Lee contacted Park and later sent the group bitcoin worth 1 million won owned by A. The first trial court said, "It appears A sought to track Park's movements to the extent that North Korea had issued death threats."
◇ Court: "To pursue profit… denies the crime and shows no remorse"
In the first trial, Lee was sentenced to four years in prison and four years of disqualification. The first trial court determined that Lee could be seen as recognizing that A was a North Korean operative, not from China or Russia, given that Lee had been instructed to contact a defector group. However, it considered in sentencing that Mr. C firmly rejected the offer and that the watch-type spy camera had poor image quality, so state secrets were not collected.
In the second trial, the court dismissed both Lee's and the prosecutor's appeals and upheld the original ruling. The appellate court said, "The defendant committed crimes that could have put the entire Republic of Korea at risk in pursuit of highly personal and economic gain," adding, "While claiming the conduct does not constitute a violation of the National Security Act, the defendant denies all wrongdoing and shows no remorse."
The Supreme Court also dismissed both Lee's and the prosecutor's appeals, saying the appellate ruling did not misunderstand the law.
◇ Officer recruited under the claim "I thought he was an ethnic Korean from China connected to Russian intelligence" found not guilty
Meanwhile, Mr. B, who was an active-duty officer, was indicted on charges of receiving cryptocurrency from North Korean operative A and engaging in espionage. However, he was acquitted by a Court-martial.
Mr. B testified, "A introduced himself as an ethnic Korean in his mid-30s living in China, and when I asked where the military-related materials were going, he consistently said they were going to Russian intelligence," and "I did not suspect in the slightest that A was a North Korean hacker or related figure."
The Court-martial ruled that the military prosecutor failed to prove beyond a reasonable doubt that A was a North Korean operative and that Mr. B received instructions from A.