- North Korea’s biting sanctions has seen the country resort to illegal cryptocurrency activity to gain funds needed to keep its nuclear and missile programs alive
- A report by defense think tank Royal United Service Institute has exposed the vulnerability of Southeast Asia’s growing cryptocurrency sector to North Korea’s cyber attacks
- Southeast Asia should implement a series of safety measures to save its growing yet vulnerable cryptocurrency sector
On 14th April, the Royal United Services Institute (RUSI), the world’s oldest independent think tank on international defense and security, exposed the presence of a growing threat to Southeast Asia’s growing yet vulnerable cryptocurrency sector elevated by North Korea’s cyber capabilities and financial networks.
North Korea’s nuclear and missile ambitions have caused the country to become a victim of harsh sanctions from the United Nations, the United States, and other countries. North Korea has also come under severe criticism for using cyber-attacks to gain financial resources needed to keep its nuclear programs running.
In Feb 2019, a widely publicized meeting between U.S. President Donald Trump and North Korea’s leader Kim Jong Un held in Hanoi, Vietnam, collapsed before any agreement was reached. The meeting was cut short because of underlying disagreement over the lifting of sanctions.
Details of the Report
Due to the sanctions that have crippled the country’s economic growth, North Korea has now resorted to virtual assets as they are in dire need of constant funds to run its nuclear operations amid growing hefty sanctions. In the RUSI report, it has cited that North Korea is allegedly hijacking crypto exchanges in South Korea as well as playing a leading role in the 2017’s WannaCry global ransomware attack.
The report quotes that North Korea is a “determined and sophisticated cyber actor in need of financial resources” and will certainly continue to find ways of illegally obtaining and exploiting cryptocurrencies.
Despite overwhelming evidence, the country has in the past vehemently denied claims of cybercrime. For instance, In September 2018, the official Korean Central News Agency highlighted comments by a foreign ministry official denying involvement in the WannaCry attacks, instead implicating the United States stating that it’s the “chief culprit responsible for posing security threats in cyberspace.”
Southeast Asia crypto sector especially vulnerable
Despite the immense growth of Southeast Asia’s virtual asset sector, it lacks strict well-coordinated regulations exposing it to “systemic risk” that can easily be exploited by North Korea. North Korea could easily convert illicitly gained digital assets into fiat currencies including U.S dollar, euro, yen, and yuan.
From the report, Singapore is leading in the implementation and enforcement of crypto-asset regulation in Southeast Asia. Malaysia, the Philippines, and Thailand are racing against time to regulate cryptocurrency exchanges to match the requirements of the intergovernmental Financial Action Task Force, which sets global standards for fighting money laundering and terrorist financing.