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The collapse of the bitcoin has a unexpected victim in North Korea. Pyongyang owns a large amount of illegally obtained cryptocurrencies. According to a news agency investigation Reuters, North Korea has invested a lot of resources in the theft of cryptocurrencies in recent years, creating a dedicated group and making large sums disappear. The cryptocurrency crash wiped out millions of dollars of stolen funds from North Koreans, threatening a key source of funding for the country. The bitcoin crisis may have had the unexpected positive effect of delaying Pyongyang’s nuclear and missile programs.
The role of Lazarus
In March, according to the official sources of the United States Department of the Treasury, cybercriminal group Lazarus stole nearly $ 615 million in digital coins from the Ronin network, one of the largest online thefts ever made. The US agency and industry experts say without a shadow of a doubt that the North Korean government is behind the operation, based on the methods of cyber attack and subsequent laundering of stolen funds. Industry analysis firms, including Chainalysis and Elliptic, have links between Lazarus and the North Korean government confirmed. The criminal organization has been accused of involvement in numerous ransomware attacks on international banks. On June 23, the Lazarus group became the protagonist of another notable theft: 100 million dollars in cryptocurrencies from the American company Horizon Bride.
Since citizens’ free access to the internet is prohibited in North Korea, the aspiring computer scientists are sent to gain experience in China, the only country that still maintains reasonable relations with the Kim Jong-un regime. In China, second the cybersecurity agency Ncc Group, they learn to use computers and then return home and work for the regime. Given government support, North Koreans perpetrators of web thefts do not run the risk of being prosecuted in their country of origin.
Less funds for armaments
The sudden drop in cryptocurrency values has complicated Pyongyang’s ability to cashing in on the spoils of illicit appropriations. This could affect how the government plans to fund its military programs, two South Korean government sources informed of the matter said. Reuters. North Korean cryptocurrencies not yet recycled, monitored by Chainalysis and which include funds stolen in 49 operations from 2017 to 2021, are decreased in value from $ 170 million to $ 65 million since the beginning of the year due to the current devaluation.
North Korea already gets only a fraction of what it steals, because must use brokers willing to convert or buy cryptocurrencies no questions asked. Usually, after obtaining cryptocurrencies, Lazarus tries to convert them into bitcoin, then finds agents who buy them at a discount for cash. The money is then invested mainly in the purchase of armaments and military tools. “Cyber attacks have become absolutely critical to Pyongyang’s ability to evade international sanctions and raise funds for its missile programsEric Penton-Voak of the United Nations said. The collapse in the value of bitcoins is limiting Kim Jong-un’s ability to turn digital stolen goods into cash. This will slow down the nation’s military missions, but cybercriminals are likely now are directed at other online crimes more profitable.
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