A rogue state with a dismal human rights record now reportedly holds more than half a billion dollars in cryptocurrency.
According to Nikkei Asian Review, a new report from the United Nations finds North Korea has stolen huge sums of crypto that could be used to circumvent unilateral government sanctions imposed by the UN Security Council. The report finds the crypto was hijacked in a series of cryptocurrency exchange hacks between 2015 and 2018.
“The government has stolen money through cyberattacks, creating a pool of illicit funds that has grown since 2016, the panel said. The attacks are believed to be conducted by a specialized corps within the North Korean military and are now an important part of North Korean government policy.”
The findings say North Korea may have already begun spending its digital assets to buy ships from a startup in Hong Kong.
“North Korea is also suspected of using blockchain, the basic technology behind virtual currencies, to get around financial restrictions. One example is Marine Chain, a Hong Kong-based startup that bought and sold ships around the world using blockchain technology. The company is suspected of supplying cryptocurrencies to the North Korean government until it was shut down in September 2018.”
The report highlights just how effective blockchain and cryptocurrency is at removing intermediaries, preventing governments and banks from leveraging their national currencies to impose control and sanctions.
Highlighting the bright side of digital assets that can flow without intermediaries, Twitter CEO Jack Dorsey recently offered his views on the borderless nature of cryptocurrency.
“The internet as a concept, since 1979, continues to break down these barriers and these boundaries that we put upon ourselves in terms of communities or nations or cities. Just how we think about the segmentation of the world. It enables us to think about one humanity. And I think we’ve seen that with networking, we’ve seen that with media, we’ve seen that with communication, and it feels like one of the most critical last pillars of that is currency.
And I guess I just approach this as, what does the internet ultimately want? It will want to have a native currency, a currency that is effectively global and exists on its territory instead of through the territories of the various nation states that we have today. I can’t think of anything more exciting than that, and also I think it speaks to internet ideals and where the world is inherently going. I don’t want to wait around for that to happen to me or to us as a company. I want to make it happen. So that’s why getting more into Bitcoin and cryptocurrency was so interesting for us.”
ShapeShift CEO Erik Voorhees compares the free-flowing nature and power of crypto to email, a relatively new and extremely empowering technology that we all now take for granted.
“One analogy I like to use is, imagine if our email system had several email providers. And whenever you sent an email to someone else, it had to be approved by the email provider. And they would actually read it, consider it, see who it’s going to, who it’s from, know the identities of both parties. and at their judgement and on their timeline, would send the message on.
No one would tolerate that, knowing an email system [exists] where anyone anonymously can send information and messages to each other for free. So why do we tolerate that with money? Money is also just information and it’s a way of humans to interact. Why do people tolerate that banks can stop their payments, judge their payments? That banks must know who it’s going to and who it’s being sent from. So it’s a big hypocrisy, and I think Bitcoin is making that hypocrisy increasingly transparent.”
The political crisis and crippling hyperinflation in Venezuela offer another look at the impact of Bitcoin and cryptocurrency on the world stage.
In Venezuela, economist Carlos Hernández reports that in order to avoid his country’s daily inflation rate of 3.5%, he now stores his money in Bitcoin and converts it to bolívars when he needs to make a purchase.
While cryptocurrencies can bank the unbanked and help people resist oppressive regimes and collapsing economies, they can also, in the case of North Korea, help totalitarian leaders evade boycotts.
