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North Korea’s $1.5-billion crypto war chest

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Experts looking at how North Korea continues to import and export goods despite numerous sanctions agree the country’s $1.5 billion cryptocurrency war chest is used to fund an illicit web of trade networks and supply chains, Coindesk reported.

Blockchain analytics company Chainalysis said it is “comfortable” with the $1.5 billion figure stated in a recent webinar (a significant increase on various estimates made last year, ranging from about $200 million to $500 million for the amount of crypto amassed by the Hermit Kingdom). 

Jesse Spiro, global head of policy and regulatory affairs for Chainalysis, told CoinDesk it’s logical to assume North Korea’s ill-gotten crypto is being moved in trade-based money-laundering networks. 

“When it comes to trade-based money laundering, the issue, especially for sanctioned actors, is cross-border money movements,” said Spiro. “When you talk about how North Korea could actually execute this in relation to finances, I believe crypto is used to facilitate it.”

Priscilla Moriuchi, head of nation-state research at Recorded Future and a non-resident fellow at Harvard’s Kennedy School of Government, pointed to recent examples of the Democratic People’s Republic of Korea (DPRK) moving crypto across borders in the latest US Department of Justice indictment of two Chinese nationals involved in laundering over $100 million of crypto. 

The “logical conclusion” is North Korean is using cryptocurrencies to fund trade networks, said Moriuchi. Evidence documenting this cross-border movement is still in the early stages of being published, she said. 

“I believe it is happening but that we have not been able to document the end-to-end lifecycle yet. We have many pieces of the puzzle we just do not have the complete picture,” Moriuchi said.

Sleuthing by Chainalysis has mapped flows of crypto stolen by North Korean hackers moving to exchanges. As with Moriuchi, the analytics firm has yet to detect concrete links to global trade networks. 

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