The US keeps imposing new sanctions on North Korea over its nuclear program but they’re not changing Kim Jong Un’s behavior — and for a surprising reason: Pyongyang’s skill at using cryptocurrencies.
Five days ago, America sanctioned dozens of ships, shipping companies, and other firms that allegedly help Pyongyang fund its nuclear and missiles programs. That move is part of a broader US strategy to starve the North Korean regime of money it would use to improve its weapons. The Trump administration wants to make these punishments so severe that Pyongyang would potentially be open to negotiations over the programs.
The problem is North Korea can partially skirt financial restrictions with cryptocurrencies, an online form of money, according to Priscilla Moriuchi, formerly a top National Security Agency official charged with overseeing cyber threats from East Asia.
Moriuchi estimates that North Korea earns between $15 million and $200 million by creating and selling cryptocurrencies and then turning it into hard cash. (Their take fluctuates depending on the digital currency’s worth when North Korea cashes out.) That’s not enough money to fully fund North Korea’s weapons programs, to be sure, but it ensures they don’t completely shut down.
So even though sanctions hurt North Korea’s physical economy, there are currently few ways America can curb Pyongyang’s growing digital economy. That means North Korea has an even greater ability to keep its nuclear program running than we might think.
“I would bet that these coins are being turned into something — currency or physical goods — that are supporting North Korea’s nuclear and ballistic missile program,” Moriuchi told me.
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