Gaining popularity in the last few years, the concept of cryptocurrency is now hoarding the internet with the introduction of Bitcoin. Unlike the conventional currency, this virtual currency is decentralized, is easy to set up, completely transparent and non-repudiable.
Hence making the prospect of trading it even more delightful. However, recent reviews show that the cryptocurrency may be exploited by certain agents to their usefulness, one such prominent example being North Korea.
According to Recorded Future, an intelligence research firm backed by Google Venture and In-Q-Tel (a venture capital firm funded by the CIA), reported that North Korea began “mining” bitcoin on May 17 and could be using the digital currency to generate income for the regime (source CNBC).
Their hackers have been targeting, the South Korean cryptocurrency exchange, the security firm FireEye Inc. informs. They further elaborated that the South Korean exchange has been under attack three times in the recent months, believing that the North Korean hacker group was behind this, working along with Kim Jong-un Regime.
The speculations are supported by the facts that there has been a ban imposed by the UN on North Korea, accompanied by a couple of sanctions aimed at the country’s external revenue regimes.
Hence with the diminution in the flow of money, North Korea has turned to virtual currency. And since the country is in no way halting the Nuclear testing program, the UN would be forced to place even drastic sanctions restricting the flow of revenue, consequently forcing the regime to intensify its efforts to hoard Bitcoin.
Priscilla Moriuchi, from Recorded Future, first came across the unusual trends and spotted bitcoins being mined. Locating the trends, she spotted that the activity was initiated in North Korea, however she could only detect the mining, not tell the amounts being mined. Mining in the cryptocurrency means to earn coins.
It is done by using high performance, smart computers to solve different complex mathematical problems, thus earning bitcoins. The more one solves the more one earns. However, in a despotic country, as North Korea, who could be capable of such activities. Since half the people there don’t even have access to internet.
This caused the researchers to narrow down the targets to certain elites, that is the ruling class. They access the internet through IP ranges, and confirming the hypothesis presented by Moriuchi, the current evidence points to the Kim Jong-un Regime. And the need for funds after the placement of sanctions only further confirms the suspicion. However, even if Korea does ends up mining tons of bitcoins, would they be of any use in the real world?
Even the head macro strategist at Brean Capital LLC, Peter Tchir, appears to be concerned since North Korea stepped up its game to earn increased amounts of Bitcoins and other cryptocurrency. As despite its volatility, one bitcoin is worth 35,000 US dollars.
Although they may take over the cyber wealth, North Korea would not be able to exchange them for the conventional currency, at least not with the US.
For the US has placed a strict policy over the digital currency exchange, handing it over to FinCen, Financial Crimes Enforcement Network, which would eventually go through and report the suspicious transactions. Then why go through the tedious task of solving complex equations, unless there is another potential provider in the game. China, hypothetically speaking, might be one of those potential providers.
However, there is still no concrete evidence as to North Korean attacks on cryptocurrency outside South Korea.
If such instances do occur, they would not be taken as a shock, since North Korea needs all that money, considering the sanctions placed. Nevertheless, it would be a dangerous strategy by Kim Jong-un considering the volatility of digital currency.