North Korea Creates Gambling Websites and Sells Them to Korean Crime Organizations... Trillions Won in Profits

Personal Information of Key Members of North Korea's Kyunghung Information Technology Exchange Office (Source: National Intelligence Service)

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A North Korean IT organization that created illegal gambling sites for South Korean cybercrime groups to earn foreign currency has been caught by authorities. The profits earned by South Korean criminal organizations through this are estimated to be in the trillions of won.

On the 14th, the National Intelligence Service (NIS) announced that it had identified the identities of North Korean IT organization members who developed and sold illegal gambling sites to South Korean cybercrime groups, as well as the overall status of site development, sales, and operations.

The North Korean IT organization identified by the NIS is "Kyonghung Information Technology Exchange," operating in Dandong, China. It is an organization under Room 39 of the Workers' Party, which manages and procures personal slush funds for Kim Jong-un.

Belonging to the Reconnaissance General Bureau responsible for operations against the South, and dispatched to Room 39 to oversee Kyonghung's operations, the team led by Director Kim Kwang-myung includes 15 members such as Jeong Ryuseong and Jeon Gwonuk, operating under a division of labor system. They produce and sell various software including gambling sites for adults and teenagers, remitting about $500 per person monthly to Pyongyang.

The NIS obtained social network service (SNS) conversations where members revealed their names and affiliations, as well as photos and video materials such as forged Chinese identity cards used for disguises.

SNS where Director Kim Kwang-myeong of Gyeongheung admitted facts such as being affiliated with North Korea (Source: Provided by the National Intelligence Service)

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Their residence was confirmed to be a dormitory at a clothing factory called "Geumbonghwang Clothing Co., Ltd." located in Fengcheng, Dandong, operated by a Korean-Chinese businessman involved in North Korean trade.

They disguised themselves as Chinese developers by synthesizing their own photos onto Chinese ID cards exposed on portals like Google and LinkedIn, or through Chinese brokers, then sought work on SNS platforms such as Telegram, WeChat, QQ, or freelance and job sites like Upwork.

Due to UN Security Council sanctions on North Korea, North Korean identities cannot secure work in China, so they disguised themselves as Chinese nationals.

The NIS believes South Korean criminal organizations engaged in transactions knowing they were North Korean because the cost of illegal gambling site production demanded by North Korea was 30-50% cheaper than that of South Korean or Chinese developers.

Kyonghung IT members charged $5,000 per illegal gambling site production and $3,000 monthly for maintenance and repairs. They also collected an additional $2,000 to $5,000 monthly as user numbers increased.

The NIS explained, "They sold administrator rights for gambling sites, i.e., IDs and passwords, to cybercrime groups and directly accessed the sites to support maintenance and repairs such as performance improvements and server error fixes, generating high profits."

Chinese citizen ID card forged and misused by Jeon Kwon-wook, a member of North Korea's Kyunghung organization (Source: Provided by the National Intelligence Service)

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In particular, after producing and maintaining gambling sites, they collected members' personal information using administrator rights and embedded malware in an 'auto program' that automatically placed bets, thereby stealing member information. They also attempted to sell over 1,100 pieces of South Korean personal information, including names, contact details, and bank account numbers.

Since it was important to safely receive payments while evading North Korean economic sanctions, they collected development fees through Chinese-named bank accounts or payment services like PayPal that facilitate overseas remittances, then cashed out at banks in China and transferred the funds to North Korea.

The NIS stated, "This is the first time concrete evidence has been publicly disclosed to the people showing that North Korea is deeply involved behind cyber gambling crimes, which have recently become a serious social problem in South Korea."

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