Sanctions? What Sanctions? North Korea Finding A Window in Crypto

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Even in the face of US and UN imposed sanctions, North Korea is resolute and effective in rendering international embargoes useless. Recent chronicles from the US Panel of Experts now corroborate findings of what cyber experts, foreign relations specialists and other observers that the isolated country have all along been using their formidable cyber prowess to by-pass sanctions and raise money to fund their nuclear operations.

Not only do the country’s operators working in cohort with
the country’s intelligence arm, the Reconnaissance General Bureau, said to be
actively siphoning funds from closed accounts in Europe to bank accounts
throughout Asia via the previously flagged Glocom and the Malaysia-Korea
Partners Group of Companies (MKP). The shell company’s illicit activities
including “ongoing use of overseas
companies and individuals to obfuscate income-generating activities for the
regime of the Democratic People’s Republic of Korea
” have been highlighted
in previous Panel of Expert reports.

However, what is striking is the country’s decision to by-pass financial sanctions via crypto that is causing jitters. Expected to increase not only in frequency and sophistication, it has been authoritatively established that the country has been actively sponsoring hacks on different exchanges and through their cyber activities carried out by elite units of DPRK military, they have amassed an estimated $881 million after infiltrating and stealing funds crypto exchanges. Of this staggering amount, $571 million can be directly linked to the state sponsored hacker group, Lazarus. 

Apparently, Pyongyang is resorting to crypto as a tactic of
circumventing sanctions thanks to the pseudo or anonymous nature of digital
assets that makes it near impossible for internet sleuths to trail losses. It
is after they hack and steal funds that the country through its agents hire
individuals to launder assets via individual wallets or by employing mixing
services in a bid to obtain sanction free USD. Aside from launching attacks on
the Bank of Bangladeshi hack where $81 million were lost and consequently
laundered through multiple bank accounts, remittance services and casino
junkets, most of these funds were from Coincheck when the exchange reported
losses exceeding $500 million.

“Cyberspace is used by the DPRK as an asymmetric means to carry out illicit and undercover operations in the field of cybercrime and sanctions evasion. These operations aim to acquire funds through a variety of measures in order to circumvent the sanctions.”

Even with all evidence suggesting a well-orchestrated and deep-set
activities of the regime bent towards launching attacks on financial platforms
across the world, representatives of the DPKK persistently deny their
involvement in any form of economic espionage or devastating hacks.

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