Does North Korea’s Use Of Crypto Spell Danger For Southeast Asia?

A new report by Royal United Services Institute for Defence and Security Studies (RUSI), published April 12, has brought some disturbing facts to light about the real threat of North Korean crypto activity, that could possibly pose a danger to whole of Southeast Asia.

The report, titled Closing the Crypto Gap: Guidance for Countering North Korean Cryptocurrency Activity, reveals how the large history of North Korea’s involvement in cryptocurrency has been linked with cyberattacks, targeting specific entities or the entire globe. It draws correlations, and substantiates it with proof.

It has been universal speculation, that North Korean hacker groups have been responsible for much of the cyberwarfare and crypto based hacking that we have witnessed. The summary report begins by stating:

“North Korea has gone to extremes to raise funds and evade international sanctions, recently expanding these efforts to include the exploitation of cryptocurrencies such as Bitcoin.”

With stringent international sanctions choking North Korea’s trade and economy, it was only natural that the country would try to exploit the potential of cryptocurrency, once again adding fuel to the debate about how crypto can also empower those who have wronged humanity, be it terrorists or dictatorial regimes.

The report has issued warnings regarding the potential threat that North Korea’s continued use of crypto, to evade sanctions, can pose for the rest of Southeast Asia in particular. Afterall, we have previously reported extensively on a primary hacking group based out of North Korea called Lazarus, who are behind more than half of crypto hacks.

North Korea has maintained a sophisticated campaign of cyber attacks that have allowed the nation to survive, despite crippling sanctions being imposed on them. The report outlines three major areas which ultimately describe North Korea’s crypto activities: fundraising, stockpiling and circumvention.

In particular, North Korea’s continued attacks target South Korea, and the rest of Southeast Asia. These regions stand to lose a lot if North Korea keeps at it. Which is why this report is also a call for action, to ‘mitigate’ the threat that North Korea poses. The report concludes that:

“Countries in Southeast Asia face several vulnerabilities to the types of illicit activity North Korea has engaged in using cryptocurrencies.”

RUSI has recommended six steps to “mitigate” future dangers, which include risk assessment, beefing up anti-money laundering procedures and increasing interregional cooperation. If the entire region can coordinate their efforts to deal with the North Korean threat, some positive outcome can be hoped for.