Analyst: North Korea earned revenue from bitcoin mining

By Elizabeth Shim Contact the Author   |  Sept. 22, 2017 at 2:08 PM
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Sept. 22 (UPI) -- North Korea has been engaging in bitcoin mining to earn foreign currency for the regime, according to a former threat manager at the U.S. National Security Agency.

Priscilla Moriuchi said Pyongyang may have been turning to virtual currency exchanges in the face of heavier economic sanctions, and may have earned about $100,000 in bitcoin from May to July, Voice of America reported Friday.

Moriuchi, a threat intelligence manager at Recorded Future, said North Korean earnings from bitcoin mining are low compared to the $500 million to $1 billion North Korea earns for illegal activities such as counterfeiting bills and trafficking drugs.

North Korea's activity in the world of virtual currency has increased in 2017, following the adoption of heavier international sanctions.

Moriuchi said Recorded Future was able to determine North Korea was engaged in bitcoin mining by assessing the types of computers used in the operations at a North Korean location, the large amount of electricity used while operations were underway, and the high-volume, high-bandwidth infrastructure involved in bitcoin mining.

The mining of bitcoins take place as traders use high-performance computers to solve challenging math problems. They are then rewarded with bitcoins online.

It is unclear whether North Korea transactions in bitcoin can be sanctioned.

Bitcoin exchanges operate as peer-to-peer networks and may be harder to embargo than financial institutions with records of transactions.

The international community may have a harder time tracking North Korean transactions in cryptocurrency, Moriuchi said.

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