• South Korean police say the exchange CEO was recruited first and then used to reel in an army captain and together sold secrets to the North for crypto payments.
• The two have been arrested and the p[olice claim to have curbed the leak of any data to the north, saying this is the first time such an instance has occurred.

Two South Koreans who reportedly leaked military secrets to North Korea have been arrested, local police have revealed. The two, one of whom is the chief executive of a cryptocurrency exchange were reportedly used to infiltrate a military communication system and were paid in digital assets.

North and South Korea have been at odds for decades, going back to the Korean War back in the ’50s. The two signed an armistice to end the war but since then, they have ‘technically’ been at war. North Korea has been known to use hackers to target institutions in the South, but as AFP reports, human infiltration proved to be far more effective.

According to South Korean police, the North recruited the 38-year-old exchange CEO, whose name was only given as Lee, and used him to recruit a top military officer. At one point, the crypto executive gave a wristwatch to the military captain with a secret camera that enabled the North to spy on the military operations of the South.

Lee also purchased and assembled a Poison Tap, which is a USB-like device that when attached to any system can bypass its security protocols and unlock it. The North’s target with the Poison Tap was the Joint Command & Control System. Police further allege that the military man further gave the crypto CEO login information to the network.

“The two men have been arrested on charges of violating the national security law,” an official at the Korean National Police Agency told AFP.

“We will strictly respond to security criminals in accordance with laws and principles,” the prosecution office in the capital Seoul further stated.

Korean police claim that the army captain received about 48 million won ($38,000) for his troubles, with the crypto CEO being the big winner in the transaction with about $600,000.

North Korea has a history with cryptocurrencies and not a rosy one at that. The country has been accused of using hackers to infiltrate several of the world’s top crypto platforms and companies and stealing billions of dollars worth of digital assets cumulatively. The US Department of Treasury recently linked North Korean hackers with arguably the biggest hack in crypto’s history – the $600+ million heist of Axie Infinity’s Ronin Bridge.