A former officer of the US National Security Agency (NSA) said that North Korea had amassed an estimated 11,000 Bitcoins and may have collected as much as $210 million by converting those into fiat money in 2017 to procure funds for its military machine.

Priscilla Moriuchi said Kim Jong-un is turning to cryptocurrencies to circumvent the crippling sanctions imposed on his regime by the United Nations. She stated:

“I would bet that these coins are being turned into something – currency or physical goods – that are supporting North Korea’s nuclear and ballistic missile program.”

She theorized that North Korea had cashed in its Bitcoin hoard in December, when the value was at its peak. If the regime waited until January, then it would have collected only about $120 million. The Bitcoin price peaked at almost $20,000 on December 22.

Moriuchi, who now works for cyber threat intelligence company Recorded Future, suspects that the rogue state acquired a large number of Bitcoins through mining and hacking activities.

North Korean hackers involved in Japan, South Korea attacks

Hackers from North Korea are believed to be responsible for several attacks on Japanese and South Korean cryptocurrency exchanges. Officials at the South Korean National Intelligence Service said that North Korea was “probably” behind the attack on Japanese digital currency exchange Coincheck, which lost $500 million after a cyber breach.

In January, Recorded Future released a report detailing how North Korean hacking activities were directed towards the financial system of their rival in the South.

The report reads:

 “North Korean government actors, specifically Lazarus Group, continued to target South Korean cryptocurrency exchanges and users in late 2017, before Kim Jong Un’s New Year’s speech and subsequent North-South dialogue. The malware employed shared code with Destover malware, which was used against Sony Pictures Entertainment in 2014 and the first WannaCry victim in February 2017.”

According to Moriuchi, increased regulations in the cryptocurrency space is the best defense against the alleged illegal activities of North Korea because it would allow for a “paper trail” that is a key element in tracking the dealings of Kim Jong-un.

Pyongyang building a cache of Bitcoin

Speculations that Pyongyang is piling up Bitcoin and cryptocurrencies to dodge sanctions first surfaced in December 2017, when CrowdStrike CEO George Kurtz sounded the alarm bells.

Kurtz hypothesized that the anonymous nature of cryptocurrencies would allow Kim Jong-un to “easily bypass any sort of sanctions because there are none on Bitcoin, and the value has increased dramatically." This makes it “the perfect currency for North Korea to be hoarding,” he added.