KEY POINTS

  • North Korea's increasing use of the internet is due to its dependence on using cryptocurrency as a tool to bypass sanctions
  • The stolen cryptocurrencies that amount to billions is used by DPRK to fund its ballistic weapons program according to a report
  • There is also an increase in Monero (XMR) mining activity tracked from North Korea's IP ranges

The majority of sanctions imposed on North Korea are there to kill off any of the reclusive state's nuclear ambition that began since 2006 when the country launched its first test. But despite being exiled from the world's financial system, DPRK remains creative in finding ways to fund its weapons of mass destruction, and there are data to back it up.

North Korea's internet use increased 300% over the last three years, and that's due in large part to the country's reliance on cryptocurrencies, according to a report by Insikt Group, the intelligence arm of U.S.-based cybersecurity firm Recorded Future. Cryptos are a perfect tool for DPRK to transfer monetary value that bypass sanctions.

A United Nations report last year estimated that North Korea was able to nab $2 billion from banks and crypto exchanges using "widespread and increasingly sophisticated" cyberattacks. The country is also home to the notorious hacking group Lazarus, which was reported to be responsible for the $571 million out of $882 million worth of cryptocurrencies stolen from various exchanges.

Recorded Future's assessment, on the other hand, pointed out how North Korea developed an internet-based model for not just getting past sanctions and generating revenue but also for accessing illicit knowledge and skills. The information the country garnered was utilized for purposes such as the ones that enabled them to further their ballistic missiles program.

The report also highlighted DPRK's use of their own virtual private network (VPN) by exploiting domain name service (DNS), which the report stated was used to "exfiltrate data from the networks of unsuspecting targets, or as a means of circumventing government-imposed content controls."

There was also an increase in Monero mining activity in the country since May 2019, the report stated. The privacy coin could be more attractive for North Korea because of how it conceals data through cryptography, whereas in Bitcoin (BTC), it's made public. For that same reason, it was also the target of the Stantinko botnet that hides in Youtube videos and mines for any XMR on a user's computer.

The report also noted that other countries that are excommunicated either by similar sanctions are likely to use DPRK's tactics.

"We believe that we will begin to see other isolated nations use some of the same criminal and non-criminal techniques leveraged by North Korea to generate revenue and evade their own sanctions," the report stated.

North Korea is under heavy US and United Nations sanctions over its nuclear program, but it has been frustrated at the lack of relief after it declared a moratorium on nuclear and interncontinental ballistic missile tests North Korea is under heavy US and United Nations sanctions over its nuclear program, but it has been frustrated at the lack of relief after it declared a moratorium on nuclear and interncontinental ballistic missile tests Photo: AFP / Jung Yeon-je