Blockchain: the new weapon for North Korea?

The hostile and dictatorial regime of Kim Jong-un has allegedly been having an affair with crypto for many years through crypto-jacking efforts that have targeted countries like its neighbor South Korea and the United States. Many hacking organizations, such as Lazarus, potentially stem from North Korea, and new reports have emerged suggesting the company has stolen upwards of $700 million through crypto-jacking.

But now, it appears the cryptocurrency it’s stolen is being used, and not in a good way. Following several summits with leaders like Donald Trump of the U.S. to potentially lessen its nuclear dealings, North Korea is reportedly using its cryptocurrency stash to fund and build further nuclear weapons.

Kayla Izenman – a research analyst at the Royal United Services Institute (RUSI) – explains in a new paper how the country may be exploiting bitcoin and related cryptocurrencies to develop weapons of mass destruction (WMDs) and avoid present U.S. sanctions. She states:

Given the large amounts of cryptocurrency we’re looking at from these exchange hacks and the possibility of more coming from mining operations, it is reasonable to assume that the money may be directly financing North Korea’s WMD program. At the very least, cryptocurrency exploitation is allowing North Korea to transact with the rest of the world in ways that aim to circumvent sanctions designed to curb its proliferation financing.

North Korea has repeatedly denied any allegations that it engages in crypto or cybercrime to fund its regime, though at press time, its nuclear negotiations with the U.S. remain relatively deadlocked. One of the primary reasons is because Kim Jong-un is requesting that strict economic sanctions set against the country be removed.

In addition, photos emerged last March that seem to suggest the country is looking to launch nuclear missiles or even a space rocket from a base in Pyongyang, the nation’s capital.

Recently, the country announced that it would be hosting its first-ever blockchain conference, though foreign media is not permitted to attend. Citizens from Japan, South Korea and Israel will also not be granted entry.

Izenman’s paper states that countries must act quickly and accordingly against North Korea if they wish to avoid the consequences of the nation’s abuse of crypto. It concludes:

If carried out with the appropriate urgency… countries in the region can succeed in making themselves less vulnerable to the risks of North Korean cryptocurrency activity.

Kim Jong-un and Donald Trump engaged in their first summit during June of 2018. While results appeared positive, a second summit in March of this year seemed less so. Both leaders have commented that they are open to a third summit towards the end of 2019.