On March 2, the U.S. Department of Justice indicted two Chinese nationals for allegedly laundering cryptocurrency on behalf of North Korea. The laundering scheme ferreted away part of almost $250 million worth of virtual currencies stolen from a cryptocurrency exchange in 2018 by the North Korean-affiliated Lazarus Group. Through elaborate software programming, the two Chinese nationals, Tian Yinyin and Li Jiadong, converted much of the stolen cryptocurrency into regular currency at Chinese banks, according to a U.S. Treasury announcement sanctioning them both.
The case exemplifies how cryptocurrency obfuscation tools and techniques are likely to play a growing role in financing threats to U.S. national security. As U.S. adversaries get more acquainted with blockchain technology, their hostile cyber operations are likely to rely increasingly on cryptocurrency activity. And rogue states are likely to become more innovative in using cryptocurrencies as they try to dampen the impact of U.S. economic sanctions.
Read the full article in Lawfare.
More from CNAS
CommentaryHow Biden Could Use Trump’s Trade War Thumbscrews to Fight Climate Change
Global climate change is undeniably a crisis, arguably the single greatest national security challenge the United States faces, and certainly a vastly greater threat than many...
By Peter Harrell
CommentaryA Council of Democracies Can Save Multilateralism
The world desperately needs a new institution that is both global in reach and unified in vision....
By Edward Fishman & Siddharth Mohandas
CommentarySharper: Global Coronavirus Response
Analysis from CNAS experts on the most critical challenges in U.S. foreign policy....
By Chris Estep & Cole Stevens
CommentaryHow U.S. Sanctions Depend on the Federal Reserve
Foreign policy professionals will have to understand what the Federal Reserve is doing and how it affects U.S. national security....
By Edoardo Saravalle