Back to the list

Northern Korea: How Kim Jong-un' Hackers Confront UN

Oleg Koldaev, Catherine Lange

The teaching of the Juche says that the main thing in socialism is not money, but a person and his ideas. When Kim Il Sung was uttering these words, the concepts "digital" and "virtual" still did not exist. Today, grandfather Kim would have turned over the grave, knowing what his grandson is doing.

According to some reports, Kim Jong-un supports the imperialistic mining of cryptocurrency and encourages the theft of bitcoins from stock exchanges of its southern neighbor. The first supposition that North Korea shows some interest in the virtual market was made by the cybersecurity specialist, researcher of FireEye company Luc MCNAMARA: "We definitely see that sanctions are a great incentive for this kind of activity," he said in one of his interviews. They probably think that this is a very cheap way of extracting money".

In his report, MCNAMARA hinted that bitcoin in particular and cryptocurrency, in general, were very attractive for totalitarian regimes due to the lack of state regulation and anonymity. Indeed, the attacks of South Korean crypto banks coincide with shot turn leaps up and down in the value of virtual assets. One such attack was crowned with success: 3,800 bitcoins for $ 15 million were taken from the stock exchange in an unknown direction.

Moreover, there is a certain correlation between attacks on cryptocurrency resources and attacks on servers and services of the largest enterprises, such as Samsung Electronics and Sony. Although, MCNAMARA is not tired of repeating that he does not have concrete proofs, but his words are confirmed by two opinions.

One such opinion was expressed in an exclusive interview for Bitnewstoday.ru. South Korean start-up investor and consultant Baron Chang: "I have no proven sources of information. But there are rumors that in North Korea the skilled hackers are supported by the government. Hackers have already attacked important services many times and, therefore, they have the technical ability to earn cryptocurrencies". The business developer of blockchain platforms, Vlad BURLUTSKY from New York, said more specifically: "Their hackers are seizing computers to obtain cryptocurrency. Thus, under the conditions of international sanctions, the DPRK is hunting for the cryptocurrency. "

We can argue on the objectivity of these words. But in November last year, Pyongyang University invited the author of one of the Italian blockchain startups Federico TENGA to read a course of lectures. According to the expert, he was instructed to teach five hour and a half classes, in which he told the students about the mining, technical base and features of the cryptocurrency. Federico TENGA noted that although the students had not had deep knowledge of digital technologies, they had adapted everything on the fly and had tried to ask as many practical questions as possible.

Evidence that North Korea is interested in the cryptocurrency is abundant. Moreover, according to some experts on computer security, the virus WannaCry was created in this country and was a kind of key for stealing cryptocurrency.

From these rumors and impressions, we can notice the following trend. Certainly, North Korea is interested in the digital economy and transactions with virtual assets are almost the only way to attract convertible currency into the country. The country has been under international sanctions since 1953, in contrast to Venezuela (2004) and Iran (1980). It is 65 years. And if earlier there were the Soviet Union, then Russia, and China, which provided minimal support to the national economy, now the counties-giants have reduced their participation in the fate of the DPRK to a minimum.

Pyongyang has practically no choice. The periods of famine that the country experienced earlier would not be compared to a possible new Holodomor. And you can buy food by cryptocurrency, for example, in Iran. Therefore, North Korean hackers create a kind of an airbag for the regime of Kim Jong-un.

But there is another side of this phenomenon. Despite the fact that the sanctions against Pyongyang are intensifying, global technological processes do not bypass North Korea. And after the technologies, there is a transformation of consciousness. Ideas of the Juche, though imposed, as religious dogma, but for a long time, people do not think so. Perhaps they do not imagine the same value even for Kim Jong-un himself. By the way, along with cryptocurrency scandals, there was another curious event. Images of Kim Il Sung disappeared from North Korean money.

There is an impression that the DPRK is still trying to penetrate into another political and economic reality. But, most likely, when the cryptocurrency in North Korea appears on the market, it will immediately be marked as stolen. Civilized financial organizations, for example, crypto exchanges will not work with stolen assets. And soon the national regulators will be able to find ways to seize such crypto from circulation. From this, no doubt, the virtual market will become worse. It sensitively reacts to the interference of power structures. But in North Korea, such a crypto will not save anyone. It will be able to buy neither food for the people, nor a limousine for the leader. After all, the absolute anonymity of digital coins is a myth. Especially for countries that are used to live in myths.

Back to the list