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North Korea laundered money through a Hong Kong-based blockchain firm: UN

Wed, 06 Nov 2019, 12:22 pm UTC

North Korea, which has been accused of crypto theft in the past, reportedly used a Hong Kong-based blockchain firm to carry out money laundering activities.

In its quarterly report, the UN Security Council's Sanctions Committee on North Korea alleges that the country established a blockchain-based shipping and logistics firm, called Marine China, in Hong Kong in April in a bid to circumvent international sanctions, Chosun reported.

The company is reportedly owned by Julian Kim who also goes by the alias Tony Walker. According to the report, Kim, who is also the sole investor in the firm, brought in another person as the firm’s head and tried to withdraw funds multiple times from banks in Singapore.

To make it difficult to track the stolen cryptocurrencies, the country exchanged them into cash via at least 5,000 separate transactions through several countries.

The report also mentions another method being used by North Korea to launch precision attacks, called "spear-phishing.” It estimates 17 countries to have become targets of this attack over the past three years, including Bangladesh in 2016.

Furthermore, the report also noted that North Korean hackers have developed a malicious code to move stolen bitcoins to a server at Pyongyang's Kim Il-sung University.

North Korea refutes crypto theft allegations

In a previous report, the UN said that North Korea stole $2 billion from banks and cryptocurrency exchanges via cyberattacks to finance its weapons of mass destruction (WMD) programs.

“According to some estimates, the DPRK has managed to generate around $2 billion using cyber-attacks, which represents a significant portion of the DPRK’s revenue stream,” the UN said.

A spokesperson of the National Coordination Committee of the Democratic People’s Republic of Korea (DPRK) outrightly refuted the accusations, calling them “sheer lie”.

“Such a fabrication by the hostile forces is nothing but a sort of a nasty game aimed at tarnishing the image of our Republic and finding justification for sanctions and pressure campaign against the DPRK,” the spokesperson said.

North Korea’s national cryptocurrency

Alejandro Cao de Benos, the official in charge of North Korea’s cryptocurrency conferences told Vice in September that the country was in the early stages of developing its own cryptocurrency. The objective, he said, is to “avoid crippling international sanctions and circumvent the U.S.-dominated global financial system.”

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