The recent collapse in the price of cryptocurrency has destroyed hundreds of millions of dollars. However, this has also caused a dramatic decline in the value of North Korea’s stolen cryptocurrency.
Four digital investigators claim that a crucial source of income for the country subject to sanctions and its weapons programs is in danger due to the drop in the value of the stolen cryptocurrency.
North Korea is a serious cyber concern because, according to the U.S. Treasury, it has recently spent a lot of money on cryptocurrency theft. In March, the nation was complicit in one of the biggest bitcoin thefts, in which over $615 million was stolen. The Axie Infinity Ronin Bridge hack is the theft in question.
The significant decline in crypto values has made it harder for Pyongyang to profit from the aforementioned and subsequent heists. It’s possible that this will affect how it funds its weapons initiatives. The sources asked for anonymity because the topic is delicate.
Stolen cryptocurrency loses value
The value of old, unlaundered North Korean crypto assets, which includes money seized in 49 hacks from 2017 to 2021, has decreased from $170 million to $65 million since the year’s beginning, according to New York-based blockchain analytics startup Chainalysis, the business told Reuters.
One of North Korea’s crypto asset caches from a 2021 heist, which had been worth tens of millions of dollars, has reportedly lost 80 to 85 percent of its value in the past few weeks and is now only worth $10 million, according to Nick Carlsen, an analyst with TRM Labs, a U.S.-based blockchain analysis company.
Since revealing specifics about the types of cryptocurrencies North Korea has may betray their probing methods, analysts are wary to do so. According to Chainalysis, ethereum made up 58 percent, or roughly $230 million, of the $400 million that was stolen in 2021.
Using publicly available blockchain data, Chainalysis and TRM Labs monitor transactions and identify potential criminal activity. This behaviour has been noted by sanctions monitors, and public contracting records demonstrate that both businesses work with the DEA, FBI, and IRS, among other U.S. government agencies.
At a meeting in Washington, D.C., Eric Penton-Voak, the coordinator of the UN panel of experts that oversees sanctions, said that Pyongyang’s capacity to defy sanctions has become dependent on cyberattacks. Even while it is believed that cryptocurrencies make up a minor fraction of North Korea’s finances, they are also raising money for their nuclear and missile projects.
Sanctions watchdogs warned in 2019 that North Korea has raised an estimated $2 billion for the development of its WMD through hacking.