One of the special features of bitcoin and other cryptocurrencies is the fact that transactions are incensurable, i.e. no one can limit or block them: those who own tokens can use them as they see fit, without anyone being able to prevent them from doing so.
Countries subject to financial embargoes or international sanctions, such as North Korea, are well aware of this.
And the Pyongyang regime has already been following the evolution of the cryptocurrency sector for some time because it is interested in the fact that the incensurability of the transactions, typical of these technologies, can allow circumventing possible blocks.
In this regard, the Asia Times reports that two analysts of Washington’s financial intelligence – Lourdes Miranda, an independent analyst and financial crime investigator, and Ross Delston, an independent lawyer specialized in anti-money laundering and the fight against the financing of terrorism – have explained that North Korea is using cryptocurrencies to circumvent global banking laws and evade US sanctions.
The two analysts explain how North Korea (DPRK) uses several international exchanges and international financial institutions that have relations with the United States.
In addition, the DPRK could also create its own wallets to store, receive and send cryptocurrencies to and from European online wallets that require limited identification criteria and that, of course, are not affected by the US sanctions imposed against North Korea.
For example, the DPRK could open a wallet on a Russian online service, transfer its tokens from this to a Bulgarian online wallet and then transfer the content to a Greek one.
All this would be done with anonymous transactions and using fictitious holders who are entitled to open these wallets so that they can receive, store and send cryptocurrencies without obstacles.
This is already happening with the tokens extracted by Korean miners. In North Korea, in fact, mining is quite widespread and miners can transfer the tokens extracted into European wallets using a scheme similar to that described above.
At that point, once “clean”, the tokens can be used to interact also with American financial institutions.
The complexity of this process can vary greatly depending on the circumstances, the value and the importance of the transactions in place.
For example, in some cases, mined tokens are converted into bitcoin on foreign exchanges before being spent. Transactions can also be divided into many small sub-parts, using different wallets, so as to make them even less recognizable.
According to some estimates, the DPRK could collect up to 200 million dollars with this system, but further investigations are underway to gather more information on this dynamic, also because of the fact that the DPRK is studying the issuance of its own state cryptocurrency, which could magnify the phenomenon.