2 S. Koreans Arrested for Spying for N. Korea, Paid in Crypto

SEOUL, South Korea (AP) — A South Korean army captain and a businessman have been arrested and indicted for allegedly stealing military secrets under the direction of a North Korean spy who lured them with cryptocurrency, Seoul officials said Thursday.

Both have been formally charged with violating South Korea’s anti-Pyongyang national security law, though authorities haven’t established the whereabouts of the North Korean spy, police and prosecutors said.

The army captain allegedly passed login information of a military-run computerized command and control system to the North Korean spy, the prosecutor’s office said in a statement. Police said the captain received a cryptocurrency [payment] worth 48 million won ($37,710) from the spy.

The 38-year-old businessman, who runs a virtual asset management firm, allegedly gave the captain a wrist watch with a hidden camera to support his intelligence stealing, though he ended up using his smartphone, police said.

The businessman also faces a charge that he tried to use a USB-style hacking device to obtain bigger military secrets in a possible collaboration with the army captain after getting $600,000 in the form of cryptocurrency from the spy, according to a statement provided by the Korean National Police Agency. It accused the businessman of offering financial rewards to another military officer in exchange for confidential information but that officer rejected his proposal.

Police said the businessman first came to know the North Korea spy in an online cryptocurrency community six years ago and talked with him on the phone. Police said the spy separately approached the army captain. They said both South Koreans knew they were communicating with a spy from North Korea.

It’s the first time South Korea has detected a North Korean espionage attempt to get a South Korean military officer and a civilian to work together to obtain sensitive information, according to the police statement.

South Korea’s military on Thursday confirmed the arrest of the captain, saying it will sternly deal with any attempt to undermine national security.

The two Koreas remain divided along the world’s most heavily fortified border since the end of the 1950-53 Korean War. At the height of Cold War rivalry, both Koreas routinely sent agents and spies to each other’s territory through the border, but no such incidents have been reported in recent years.