The North Korean government uses cryptocurrencies and blockchain technology to bypass the international economic and financial sanctions, according to two experts.
The appeal of cryptocurrencies has infiltrated into the minds of the North Korean officials. While cryptocurrencies were created to facilitate the peer-to-peer transactions, they can also be used by dictators and corrupt governments to avoid sanctions.
North Korea is probably already using cryptocurrencies for this purpose. At least that is what the financial analyst and investigator Lourdes Miranda and Ross Delson, a lawyer specializing in anti-money laundering and terrorist financing, think. During an interview for the Asia Times, Miranda and Delson speculated on how the North Korean crypto activity might look like:
“International criminals prefer cryptocurrencies, and North Korea is no exception. Cryptocurrencies have the added benefit of providing North Korea with more opportunities to circumvent US sanctions. They can do this by using multiple international exchanges or mixing and moving services […] to take advantage of international financial institutions that have correspondent relationships with the United States. “
It is also conceivable that North Korea could create in the future a national cryptocurrency.
“DPRK can create their own crypto-currencies or use established ones like Bitcoin. Having their own crypto-currency would also facilitate their ability to open online accounts under the guise of a non-adversarial nation using anonymous communication to conceal the user’s locations and usage on the internet,”
Leaving from this idea, Delson and Miranda added that North by creating a virtual bank, North Korea could have exclusive control over the wealth and the financial situation of the country.
“For example, DPRK could open an online wallet using a Russia-based service, transfer its crypto-currency into a Bulgaria-based wallet service and then transfer it again into a Greece-based wallet service, all through anonymous communication and using their own blockchain.”
The analysts also declared that North Korea’s primary focus is on concealing the origin of cryptocurrencies. Furthermore, after making the necessary arrangements, the government needs to convert the cryptocurrencies into fiat money.
“Once DPRK (Democratic People’s Republic of Korea) split its Bitcoin using multiple international mixing services, it could use shifting services to convert its Bitcoin into another popular crypto-currency such as Ethereum and/or Litecoin to break the linear pattern of transactions on the blockchain to obscure the origin of funds,” they said.
The two investigators also added that this would be the perfect time to split the cryptocurrencies into various European wallets. The most alarming statement is that in this way the money could reach the US banks with the help of European crypto exchanges.
“Voilà, the DPRK now has US dollars with none of those pesky sanctions attached,” said the two in the end.