A former employee of a South Korean cryptocurrency exchange has been sentenced to four years in prison after attempting to recruit a military officer to sell classified defence information to North Korea in exchange for Bitcoin, according to a ruling by South Korea’s Supreme Court on December 28, 2025.
The court found that the 42-year-old defendant received approximately US$487,000 worth of Bitcoin from an individual linked to North Korean hacking networks. Prosecutors said the funds were intended to facilitate the recruitment of active-duty military officers with access to sensitive national security information.
Investigators revealed that the exchange employee successfully approached a 30-year-old army captain, identified by the surname Kim, offering him roughly US$33,500 in Bitcoin in return for cooperation. Communication between the two reportedly took place via the encrypted messaging platform Telegram.
As part of the scheme, the defendant supplied the officer with a covert recording device disguised as a wristwatch and a USB hacking tool. These devices were intended to extract information from the Korean Joint Command and Control System, a critical intelligence-sharing platform used jointly by South Korean and United States forces. Authorities intercepted the equipment before any classified data could be compromised.
In upholding the lower court’s verdict, the Supreme Court ruled that the defendant had violated South Korea’s National Security Act, stating that he could not reasonably claim ignorance of the hostile nature of the actors involved or the potential consequences for national security. In addition to the prison sentence, the court imposed a four-year ban on the defendant working in the financial sector.
The recruited army captain was previously sentenced to 10 years in prison and fined US$35,000 under the Military Secrets Protection Act for his role in the attempted espionage operation.
The case has intensified concerns over the use of cryptocurrencies in espionage and cybercrime. North Korean-linked actors have increasingly been accused of leveraging digital assets to finance state activities, including weapons development, prompting governments and regulators worldwide to strengthen oversight and enforcement in the crypto sector.
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