DPRK use Digital Assets to Bypass US Imposed sanctions
In accordance with two experts based in Washington, North Korea has been increasingly reliant on digital assets as a means to bypass sanctions enforced by the US government.
The two experts include Lourdes Miranda, an investigator for financial crimes with a special emphasis on analysis and intel collection, as well as Ross Delston, an attorney in Washington state who focuses on tackling issues concerning terrorist funding. The experts claim that the nation’s capital had participated in both creating new digital tokens as well as trading with existing cryptos.
How Cryptos Offer DPRK a Loophole
In a written response to questions posed by the Asia Times, both experts explained that North Korea’s preference on cryptocurrencies offers multiple solutions to bypass sanctions imposed by the US. With the use of various exchanges worldwide, in addition to other tactics paralleling traditional money laundering cycles, North Korea can exploit financial entities around the world that are associated in some way to the US.
The expert-duo also noted that North Korea has the ability to take advantage of existing digital tokens as well as those they create. This facilitates their ability to issue anonymous accounts and confidently conceal details pertaining to the user such as location.
When asked whether North Korea had the ability to construct their own blockchain network in order to manipulate the nation’s public records pertaining to crypto transactions, both experts agreed. They claimed that this tactic could be used to make transactions seem as though they are originating from pre-approved sources.
Anonymity in the Crypto Sphere
Both Delston and Miranda noted that North Korea could also construct their own digital wallets capable of storing and transacting digital assets directly into European virtual accounts that do not require user ID nor follow US-based sanctions. For instance, one way to bypass such sanctions could include establishing a Russian based digital wallet from which digital assets could be transferred to any number of European accounts multiple times through the use of a North Korean developed blockchain network and a feature known as anonymous communication. In this sense, successfully concealing the original location from which the funds were received is a key advantage cryptocurrency offers North Korea.
Another tactic for concealing a fund’s location through the mixing and switching of crypto services allows North Korea to transfer any given amount of one virtual currency such as Bitcoin into another equally popular token such as Ether, further breaking up any traceable patterns throughout the blockchain. The main purpose of this ensures a successful conversion of cryptocurrencies into local fiat monies on a global scale without risk of detection or traceability. This notion was described by both experts as an insertion of digital assets into the global economy.