North Korea’s Search for Alternate Funding

While international sanctions continue against the North Korean regime under leader Kim Jong-un, the country is looking to other means for sources of funding.

Andariel, a relatively new North Korean hacking group, is seen as a key suspect behind hijacking computers to mine the cryptocurrency Monero. South Korean cybersecurity firm ESTsecurity stated that “with economic sanctions in place, cryptocurrencies are currently the best way to earn foreign currency in North Korea’s situation. It is hard to trace and can be laundered several times”.

On December 24, 2017, the software for installing the Monero mining code in host computers was created. AlienVault, a U.S. cybersecurity firm who inspected the code, said the mined cryptocurrency is being funneled to Kim Il Sung University in Pyongyang.  Kim Jong-un is a former student of the university. In the AlienVault report, North Korean IP address 175.45.178.19 shows continual activity on cryptocurrency exchange sites. In line with cybersecurity firm AhnLab, that exact IP address was used in a string of cyber attacks between 2014-15 across a wide range of South Korean markets including energy, financial, and political institutions.

This isn’t the first time North Korea is being accused of promoting cyber attacks for financial gain. Back in May of 2017, the U.S. accused the regime of creating the WannaCry ransomware attack. WannaCry, which targeted more than 200,000 computers in over 150 countries including hospitals, banks, and other companies, is said by Trump’s homeland security adviser to have “cost billions”.

Currently, Monero is being regarded as a superior choice for money laundering and other illegal activities in the criminal underground. Compared to Bitcoin, Monero funds are difficult to trace due to a new address being created with indiscriminate numbers every time a transaction is circulated. On the other hand, Bitcoin payments can be easily attributed to certain addresses.

Rapper G-Eazy stated, “given Monero is one of the safest, most secure and most private cryptocurrencies, it’s one of the best options for my fans this holiday season”. Although famous supporters like G-Eazy (along with Mariah Carey and Kaskade) praise Monero for its privacy, the nature coins such as Monero are being used for may expedite regulation closer to the cryptocurrency landscape.