The UK Think tank, the Royal United Services Institute (RUSI) have issued a paper that reveals how North Korea can exploit cryptocurrency, particularly in Southeast Asia, to circumvent international sanctions. It sets out practical guidance for countries in the region to ensure resilience against the risk of North Korean cryptocurrency activity. 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. Cryptocurrencies likely play only a peripheral role in North Korea’s overall fundraising and sanctions-evasion activity.
However, the sophistication of North Korea’s broader cybercrime operations and its general demand for ongoing financial resources present the risk that its cryptocurrency activity could become a sustained security challenge, particularly as international sanctions lead North Korea to seek financial lifelines outside the mainstream sector. The paper includes the view of the UN Security Council’s Panel of Experts on North Korea has suggested that cryptocurrencies offer North Korea ‘more ways to evade sanctions given that they are harder to trace, can be laundered many times and are independent from government regulation’.