One of the things that make Bitcoin and blockchain technology stand out in today’s world is because of its transparency. Unfortunately, it is also the reason why a lot of regulators want strict regulations on the crypto market. Cryptocurrencies have no political leanings nor is it tied to any country’s economy. And because of this, Bitcoin and blockchain technology, in general, has an allure on countries facing sanctions. In fact, Venezuela started their own cryptocurrency, Petro, in order to save the country’s economy.
However, it is also true that Bitcoin can play a role in the maintenance of dictatorial regimes worldwide. Take North Korea for instance, according to a former NSA official, Priscilla Moriuchi, DPRK was able to obtain at least 11,000 bitcoins either via hacking or mining.
If Pyongyang was able to hold the bitcoins as of January, that would already be equivalent to around $120 million. On the other hand, if the country decided to cash out during the time when Bitcoin almost reached $20,000, then the country may have made $210 million out of this transaction.
Moriuchi said that “I would bet that these coins are being turned into something—currency or physical goods—that are supporting North Korea’s nuclear and ballistic missile program”.
Hacking Crypto Exchanges
Throughout 2017, North Korea was said to be the culprit for hacking South Korean cryptocurrency exchanges. In fact, Seoul-based cryptocurrency exchange, Bithumb, lost a total of $7.4 million. It has been reported that North Korea is using mining malware infections as well as ransomware attacks in order to attack South Korean crypto exchanges. Aside from stealing cryptocurrencies that are worth millions, 30,000 personal data of its users were stolen. And because of this, Bithumb operator was fined by South Korea for their negligence.
North Korea is reportedly not stopping in 2018. Coincheck which is a Japanese cryptocurrency exchange was targeted by hackers. The cryptocurrency exchange lost a total of $500 million. However, the Japanese intelligence is still not yet done with the investigations. However, North Korea is said to be the prime suspect in this particular heist.
Mouriuchi mentioned that “North Korea has such extensive criminal networks that have been well-established for decades to facilitate illegal activities. If Pyongyang were able to cash out into physical currency, it would be relatively easy for them to move that currency back into North Korea and to buy things with the Physical currency”.
Getting Away from Sanctions
One of the reasons why North Korea may have opted to use cryptocurrencies is to stay away from sanctions. Just a few days ago, US sanctioned dozens of ships and shipping companies that have allegedly helped the nuclear program of North Korea. This move is part of US strategy to keep money away from North Korea. What Trump wants at this point is to make the sanctions severe to the point that North Korea would decide to negotiate regarding their programs.
Though the amount of money that can be generated by the cryptocurrencies aren’t enough to fund the entire missile and nuclear programs, it could actually be enough to keep it running and to ensure that it doesn’t stop soon.