Is North Korea Using Bitcoin To Get Around UN Sanctions?

The latest round of United Nations sanctions against North Korea are designed specifically to prevent Kim Jong Un from obtaining hard currency. Luckily for the Kim regime, there’s always bitcoin.

According to Bloomberg, the isolated country, facing further restrictions on exports that would bring in desperately needed Chinese yuan, has increasingly been turning to bitcoin to circumvent the sanctions.

And to try and keep the illicit digital money flowing, the country has reportedly stepped up attacks against South Korean digital currency exchanges, causing disruptions in one of the largest markets for digital currencies like Ethereum and bitcoin, according to a new report from security researcher FireEye. In addition, the North has managed to breach an English-language bitcoin news website and collect bitcoin ransom payments from global victims of the malware WannaCry attack (although we thought that one had been linked to China?).

“So far this year, FireEye has confirmed attacks on at least three South Korean exchanges, including one in May that was successful. Around the same time, local media reported that Seoul-based exchange Yapizon lost more than 3,800 bitcoins (worth about $15 million at current rates) due to theft, although FireEye said there are not clear indications of North Korean involvement.”

According to Naeem Aslam, a contributor at Forbes, the North cultivated an “army of hackers” to go after digital-currency exchanges after the digital currency’s world-beating gains piqued Kim Jong Un’s interest.

“North Korea has an army of hackers who are constantly targeting South Korea, the hectic trading hub for cryptocurrency. The strategy would aid the country in bypassing many trade restrictions which also include the new sanctions. Moreover, the massive popularity of the cryptocurrency gained Kim’s attention and for crypto traders, this represents an opportunity. A higher demand for cryptocurrency would only boost its price,” said Forbes contributor Naeem Aslam.”

North Korea’s Reconnaissance General Bureau, which directly reports to Kim Jong Un, handles peacetime cyber operations from espionage to network disruptions and employs an estimated 6,000 officers, according to a 2016 report from the International Cyber Policy Centre at the Australian Strategic Policy Institute.

A group within the RGB known as TEMP.Hermit is believed to be responsible for the attacks on the South Korean bitcoin exchanges. FireEye said it has been linked to a 2015 attack on South Korea’s nuclear industry. The hackers have also been tied by other security firms to last year’s attack on Samsung Electronics Co.’s corporate messenger app and the breach of Sony Corp.’s film studio, which the FBI blamed on North Korea.

"They’re pretty capable actors in comparison to other North Korean activity we see,” said Luke McNamara, a researcher at FireEye and author of the new report. "They’ve been creative in how they use their cyber-espionage capability."

And with the US likely to continue to push for still tighter sanctions as the North continues its provocative missile and nuclear tests – that is, until Russia and China finally say “enough” – the isolated country will likely deepen its reliance on the digital currency.

“We definitely see sanctions being a big lever driving this sort of activity,” McNamara said. “They probably see it as a very low-cost solution to bring in hard cash.”


"As more money goes into cryptocurrency exchanges and more people buy bitcoin and ethereum, exchanges become larger targets for this group,” said McNamara. He said so far he did not have evidence that Kim Jong Un’s regime has targeted cryptocurrency exchanges outside of South Korea, but did not rule out the possibility in the future.”

And with so many shadowy digital currency exchanges operating throughout Asia, cashing out the country’s digital currency positions would be easy.

“They could compromise an exchange and transfer those bitcoins to other exchanges elsewhere in Asia or exchange them for a more anonymous cryptocurrency,” said McNamara. “There are variety of things they could do to cash out.”

As Aslam points out, increasing demand for digital currencies from North Korea could ultimately lift prices on a global scale as the country is increasingly forced to transact at in bitcoin, Ethereum and their peers. North Korea isn’t the only country that’s turning to bitcoin out of a sense of desperation. As the Atlantic pointed out earlier this month, thousands of Venezuelans have taken to minería bitcoin – or mining bitcoin – to try and get their hands on precious US dollars.

Because, in some cases, it’s either that, or starvation.


MANvsMACHINE RumpleShitzkin Wed, 09/13/2017 - 00:34 Permalink

Dimon's a business guy and his interest is solely I n making money for himself and his company. Once you can get your head around that fact as well as the fact that trading revenues have been declining, it's clear as day that he sees Bitcoin and crypto trading as very fertile grounds to improve his company's financial performance. Thus, JPM will be trading cryptos soon enough if they aren't doing so already.

In reply to by RumpleShitzkin

Lost in translation Wed, 09/13/2017 - 00:07 Permalink

Oh my... yes! It all makes sense now!

DPRK is circumventing the combined resolve of the Community of Nations by using BTC to fund WMDs! It's all so clear!

Quick, someone call the United States Senate! We need a new law! BTC is a North Korean weapon of mass financial destruction! We must stop them! Anyone owning or using BTC is supporting this rogue regime! Punish them!


Krugg Wed, 09/13/2017 - 00:27 Permalink

You can't have it all ways god damnit... one article says NK's "hackers" don't even know what the internet is, then this one oh a crack Army of Experts hell bent on ruining our lives.  Which is it? 

shinobi-7 Wed, 09/13/2017 - 01:02 Permalink

Propaganda stuff anti-bitcoin! Come on "starving Venezuelans are mining bitcoins" whereas you need a supercomputer nowadays to do so! It would cost them more with the electricity they don't have than the few dollars they can get! Who would believe that? That North Korea is doing a lot of nasty things is likely but bitcoins is just a small play among others like printing 100 dollar bills. These tricks can only net a few million dollars, nothing like what a country needs. For bitcoins to go up as they have you need the financial muscles of Japan or China behind, not a thousand North Korean Hackers mostly stealing them 300 dollars at a time!

synthetically … shinobi-7 Wed, 09/13/2017 - 03:02 Permalink

(Quoting from the article: )  "According to Bloomberg, * * *  According to Naeem Aslam, a contributor at Forbes, ..."Shinobi, not only does this article not make sense if one actually does the math, (as you have suggested,) its factual basis is flimsy at best. The author's (shaky) conclusions are grounded on little other than a (largely speculative) news report from Bloomberg and an opinion piece from a Forbes contributor.   

In reply to by shinobi-7

The Alarmist Volkodav Wed, 09/13/2017 - 07:20 Permalink

60% of the Norks' power generation capacity is hydropower, which is about as cheap as you can get electricity. Guess we'll have to bomb their dams and flood thousands of people to death ... again ... to get at the scourge that is Bitcoin mining by the Rogue DPRK and it's evil hacker army.

I read things like this ... TPTB want us to think of James Bond and Dr. No, but it all comes across so Austin Powers! Taepo Dong ... heh heh!

In reply to by Volkodav

JailBanksters Wed, 09/13/2017 - 01:15 Permalink

It doesn't matter how evil you are, there is ALWAYS somevody wanting to support you.Just like John "Bom Bom" McCain, Nancy "tell em you're muslim" Pelosi,  Wasserman "I'd do it again" Schultz 

mrtoad Wed, 09/13/2017 - 04:07 Permalink

One minute bloomberg and forbes tell us NK have no lectricity or computers or toilets or, you name it, now they are telling us they are using bitcoin and are hacking.... fucks sake stop believing these sources.