North Korea rejects South Korea’s charge that it was behind bank cyber attack

North Korea on Sunday rejected allegations by the rival South that it was behind acyber attack that paralyzed the computer network of a South Korean bank last month and accused Seoul of inventing a conspiracy to justify physical confrontation, Reuters has reported. 

“The Nonghyup computer network crash is nothing more than a repeat of the Cheonan incident,” the National Defense Commission, the North’s supreme leadership body, said in a statement carried by the official KCNA news agency. 

“It is an act akin to digging its own grave that (the South) is running about madly clinging to confrontation with its compatriots through crudely fabricated schemes,” the commission said. 

The accusation that North Korean hackers were responsible for bringing down Nonghyup bank was the same type of fabrication as Seoul’s assertion that Pyongyang sank one of its navy ships, Cheonan in March last year, the North Korean government agency said. 

The relations between the north and the south of Korea were pushed to the dangerous phase of war due to the “Cheonan” case. 

The computer crash at Nonghyup affected millions of customers who were unable to use the bank’s credit cards and ATMs for more than a week, exposing the South’s heavily wired financial system’s vulnerability to organized cyber attacks. 

South Korean prosecutors said the hacking was masterminded by a group of North Korean state-backed experts also responsible for previous cyber attacks on government and corporate sites in the South.

North Korean hackers shut down South Korean bank via DDoS attack

North Korea was responsible for paralyzing the National Agricultural Cooperative Federation’s computer network in April in a second online attack in two months linked to the Kim Jong II regime, South Korean prosecutors said.

According to a Bloomberg report, “Hackers used similar techniques employed in cyber assaults that targeted websites in South Korea and the U.S. earlier this year and in 2009, the Seoul Central District Prosecutors’ Office said in an e-mailed statement today.”

The network of the bank better known in Korean as Nonghyup, was shut down on April 12, keeping its almost 20 million clients from using automated teller machines and online banking services. In all of the three bouts of online attacks, a method called “distributed denial service” was used, according to the statement.

Under the DDoS tactic, malicious codes infect computers to trigger mass attacks against targeted websites, according to Ahnlab Inc. (053800), South Korea’s largest maker of antivirus software.

Nonghyup will spend 510 billion won ($477.2 million) by 2015 to boost network security, the bank said in an e-mailed statement. The company received 1,385 claims for compensations related to the network disruption as of May 2, and 1,361 of them have been settled, according to the statement.

North Korea’s postal ministry was responsible for the 2009 attacks, Won Sei Hoon, head of South Korea’s National Intelligence Service, told lawmakers in October 2009.

Attacks in March this year targeted 40 South Korean websites, including at the presidential office, the National Intelligence Service, and Ministry of National Defense. They were traced to the same Internet Protocol addresses used in the 2009 episodes, South Korean police said last month.

The hackers prepared for the April 12 attack on Nonghyup for more than seven months, the Seoul Central District Prosecutors’ Office said today.