Experts say North Korea is exploiting the lack of global regulatory controls on cryptocurrency to steal digital currencies to fund its nuclear weapons and missile programs.
“Crypto provides Pyongyang with a new form of currency that is significantly less regulated and understood by national governments, financial institutions and international bodies,” Jason Bartlett, a researcher at the Center for a New American Security (CNAS) told VOA’s Korean Service.
North Korea stole more than $300 million worth of virtual assets between 2019 and 2020, according to a U.N. panel of experts monitoring sanctions quoted in a report submitted to the U.N. Security Council earlier this month.
In the confidential report obtained in part by CBS News, the panel estimated that North Korean cyberattackers stole about $2 billion, presumably including cryptocurrencies as well as other assets, to fund the nation’s weapons programs in 2019.
North Korea has ratcheted up its missile tests recently, test-firing 11 missiles in January.
Cryptocurrency is a digital form of currency that is “nearly impossible to counterfeit,” is generally not issued by any central authority, theoretically “making it immune to government interference or manipulation,” and allows for cheaper and faster money transfers. It can also be converted to fiat money, which is “a government-issued currency that is not backed by a physical commodity, such as gold or silver, but rather by the government issuing it,” according to Investopedia.
Unlike cash in the form of the U.S. dollar or another currency regulated by a country’s central bank, there is no central authority governing cryptocurrencies in many countries, including the U.S. and South Korea.
“A major loophole in crypto regulation that North Korea is increasing efforts to exploit is decentralized finance, also known as DeFi platforms,” Bartlett said.
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