North Korea appears to be looking into ways to leverage Bitcoin and other cryptocurrencies, potentially to dodge the trade sanctions imposed by the UN security council.

Targeting South Korea

Bitcoin’s lack of state of control and secretiveness, which helped to increase its popularity this year, would facilitate fund raising and money laundering. The threat of nuclear war has also taken Kim Jong-Un to increasingly embrace cryptocurrencies.

“We definitely see sanctions being a big lever driving this sort of activity,” said Luke McNamara, a researcher at FireEye and author of the new report. “They probably see it as a very low-cost solution to bring in hard cash.”

Sanctions on North Korea include a reduction of is textile exports by 90%, restricting its ability to earn hard currency.

FireEye has confirmed attacks on at least three South Korean exchanges, including one in May that was successful. Around the same time, 3,800 Bitcoins were stolen from the Seoul-based exchange Yapizon. The country’s diplomats have denied any involvement in those attacks.

Read more: Bitcoin jumps over $4,700 after North Korean tensions

The country’s diplomats and official media have denied the country played any role in cyberattacks, including the hacking of Sony Pictures Entertainment in 2014, in spite of the fact that its            investment in cyber intelligence has been very substantial, according to South Korean diplomats.

South Korea has become one of the busiest trading hubs for cryptocurrencies this year, with exchanges like Bithumb, the world’s biggest exchange for Ethereum.

“As more money goes into cryptocurrency exchanges and more people buy Bitcoin and Ethereum, exchanges become larger targets for this group,” said McNamara. He didn’t rule out the possibility of further attacks outside of North Korea.

The firm said previously the North Korean government had connections with the WannaCry attack from May and June. The FBI is also examining North Korea’s link to the theft of $81 million through the New York Fed last year, Bloomberg Markets reported last month.

This links with the US mandate in relation to the monitoring of cryptocurrency in circulation by foreign governments as a measure for the prevention of “illicit finance trends” as a way to “combat terrorism”, which many originally thought it would compromise the Bitcoin community.

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by Henry Vilar
Henry is Junior Reporter at IBS Intelligence, follow him on Twitter or contact him at: henryv@ibsintelligence.com
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