How North Korea Could Be Mixing Bitcoin To Get Hold Of USD
According to Cryptoglobe, two US based finance experts, Lourdes C. Miranda and Ross Delston have told Asia Times that they believe North Korea (DPRK) could be mixing cryptocurrencies in order to get hold of US Dollars, in a move designed to totally undermine US economic sanctions. The pair have found that established trading is taking place within DPRK and that there are also signs that the state could be looking to also manufacture their own cryptocurrency.
By using different cryptocurrencies across numerous exchanges, DPRK in theory are able to exploit financial restrictions. Simply put, through using numerous exchanges, authorities in North Korea are able to do things they arenât normally allowed to do. According to Miranda and Delston:
âDPRK [has the capability of] creating [its] own cryptocurrencies or using established ones like Bitcoin. Having their own cryptocurrency would also facilitate their ability to open online accounts under the guise of a non-adversarial nation using anonymous communication to conceal the userâs locations and usage on the internet.â
How could DPRK be doing this?
The research has found that DPRK could be creating a number of hot wallets, wallets that can be opened without any personally identifiable information. This means all wallets owned by those within DPRK would be totally anonymous. According to Miranda and Delston:
â[North Korea] could open an online wallet using a Russia-based service, transfer its cryptocurrency into a Bulgaria-based wallet service and then transfer it again into a Greece-based wallet service, all through anonymous communication and using their own blockchain.â
By being able to transfer cryptocurrencies from âwalletsâ in different countries, transactions become almost impossible to trace. This then can be reinforced by sending assets to wallets that do contain personally identifiable information, owned by partners outside of DPRK. Itâs literally hiding in plain sight. These movements eventually make it to the United States, where DPRK will eventually have access to USD. By passing different assets between different wallets in different countries, passing through legitimate wallets on the way, DPRK are engaging in what is referred to as âmixingâ. According to Miranda and Delston:
âMixing is sending cryptocurrency and receiving the same cryptocurrency type back. It is equivalent to requesting change for a $100 and receiving different denominations in return totaling a $100.â
What is the point in all of this?
The idea is that DPRK can use these processes in order to bypass US economic sanctions by using USD. The mixing process is used in order to ensure that the root of the buying is impossible to detect. The source of funding remains anonymous. Itâs not exactly illegal either. Obviously the bypassing of sanctions does draw up some problems, but it just seems that within this, DPRK are actually just taking advantage of the anonymised nature of the blockchain, therefore if Miranda and Dalstonâs findings are true, US authorities are going to have a tough job doing anything about it.