Who Loves Crypto? North Korea, That’s Who

What is cryptocurrency really good for? Let’s ask the North Koreans.

Raising funds from criminal activities and evading sanctions are two of North Korea’s most significant uses of crypto, according to the recently published report Closing the Crypto Gap: Guidance for Countering North Korean Cryptocurrency Activity in Southeast Asia from the Royal United Services Institute for Defence and Security Studies (RUSI), a non-profit British think tank.

According to this report, “pressure from international sanctions has led North Korea to pursue complex evasion techniques, which increasingly rely on sophisticated cybercrime operations.”

In fact, the North Koreans were behind the recent highly publicized WannaCry ransomware attack – an attack that explicitly seeks to extort crypto. WannaCry “caused widespread disruption and signalled North Korea’s desire and ability to sponsor cryptocurrency-enabled cybercrime,” according to the RUSI report.

North Korea’s crypto-based cybercrime doesn’t stop with WannaCry. “Recently, North Korea has expanded its cybercrime tactics to include exploitation of the global cryptocurrency infrastructure, which sits outside the more established banking sector,” the report continues.

One approach: targeting crypto exchanges. “North Korea has been linked to six successful exchange hacks that occurred between April 2017 and June 2018,” RUSI says.

Another approach: cryptojacking, or illicit cryptomining, where North Korean hackers infiltrate target networks and install cryptomining malware.

Cryptojacking, however, isn’t the only mining the North Koreans are up to. “North Korea’s established mining operations could offer an advantage over cybercrime insofar as mining newly minted cryptocurrencies with no indication that they have been tainted or associated with criminal activity attracts less attention,” the report continues.

Because every miner processes every crypto transaction, you can rest assured the North Koreans are processing your transactions. Is that OK with you?

The RUSI report concludes on a sober note. “North Korea’s cryptocurrency activity is increasing in value and complexity and is likely to persist as part of its technology-enabled fundraising and sanctions evasion activity,” the report says. “The potential for North Korea to engage in large-scale sanctions circumvention by accessing prohibited goods and services directly with cryptocurrencies is a risk that could grow in significance.”

The question every crypto trader must ask: are you complicit?

None of the companies mentioned in this article are Intellyx customers. Jason Bloomberg neither owns, nor plans to own, any cryptocurrency or other cryptotoken, either long or short.