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North Korea accused of building malware-gambling websites

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South Korea’s National Intelligence Service has unveiled that North Korea’s clandestine IT department is the mastermind behind a slew of domestic cyber gambling platforms.

The IT organization, referred to as ‘Gyeongheung’, is said to be part of North Korea’s infamous Room 39, the state run department tasked with generating mostly foreign-sourced revenues for the country. According to South Korea’s National Intelligence Service, it facilitated illegal foreign currency accumulation by selling thousands of gambling websites to domestic criminal syndicates in the Republic of Korea. This marks the first time North Korea’s involvement in domestic cyber gambling activities in the South has been brought to light.

According to a National Intelligence Service briefing, the North Korean run Gyeongheung Information Technology Exchange Company is based in Dandong, China, and employs a team of 15 who create various types of software that include gambling websites. The setup is said to operate under the cover of a local clothing company run by a North Korean-Chinese entrepreneur.

To sidestep UN sanctions that prohibit the overseas employment of North Korean laborers, members of Gyeongheung are said to have fabricated Chinese ID cards and faked IT certificates. The group allegedly charges around KRW 6.5 million ($5,000) per website and KRW 4 million ($3,000) for monthly maintenance and upkeep, with proceeds being funneled through Chinese bank accounts or borrowed-name accounts of Korean cyber gambling groups.

Gyeongheung members are also said to be holding administrator privileges on these gambling platforms, enabling them to steal personal data and embed malicious code. According to the intelligence service, at least 1,100 data sets belonging to South Koreans have already been located in a data base that was offered for sale by the organization.

Despite the awareness of their North Korean origins, domestic criminal syndicates in the South continued business with Gyeongheung, seemingly enticed by low production costs and Korean-language proficiency.

Frank Schuengel
Frank Schuengel
Frank Schuengel is an online gambling industry veteran with over twenty years of experience in Europe and Asia. Equally at home in the Isle of Man and the Philippines, he started his career as a sports trader before setting up and running whole operations, and more recently focusing on the regulatory and licensing side of things in the worlds of fiat and crypto eGaming. When he is not writing about gambling topics, he can be found cycling around Manila and advocating sustainable transport solutions for a Philippines based mobility magazine.

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