North Korea may be an economically ostracized nation, but it knows exactly how to get funding for its nuclear missiles program. As reported by the BBC, citing a UN report, North Korea bankrolls its nuclear program with stolen crypto funds with millions of dollars currently invested into it already.
Per the report, investigators unveiled that cybercriminals operating for the North Korean government have targeted and stolen over $50m (£37m) of digital assets between 2020 and mid-2021 from about three exchanges in North America, Europe, and Asia. The UN report also referenced an early publication from data analytics firm, Chainalysis, detailing how North Korea cyberattacks could have netted as much as $400 million worth of digital assets in the past year.
Despite the fact that Bitcoin emerged back in 2009, it is unclear when these North Korean attacks started. However, the United Nations said the country has accumulated over $2 billion for the nuclear missiles program as far back as 2019. The reports of cybercrime have been handed over to the UN Security Council for appropriate steps.
North Korea and Reliance on Cybercrime, Bad Optics for Crypto?
A major clamor amongst regulators around the world is the high reliance on cryptocurrencies as a tool in the hands of money launderers and cybercriminals. North Korea has a number of sanctions on it by the UN, the United States, and other major financial regulators including the Financial Action Task Force (FATF).
Based on these sanctions, most trading platforms have been mandated to block traders or users from North Korea, leaving the country in a tight loop that can only be broken free with a form of extreme measures. While the resort to hacking cannot be justified, it gives an avenue to go scot-free as transactions that happen on the blockchain are somewhat pseudo-anonymous.
However, the reliance on digital currencies to bypass key sanctions and to fund weapons of mass destruction gives the nascent asset class bad optics. This may notably aggravate the need for regulators to double down on their crackdown on cryptocurrencies, a move that will place more strain on stakeholders in the industry.
Beyond North Korea, there has been a lot of incidence of cybercrime hinged on digital currencies, over time, regulators will seek to devise means to curtail these occurrences.