One thing I’ve come to appreciate is that cryptocurrency isn’t really good at its killer use case: crime. Today’s example comes from North Korea, where the war chest of stolen cryptocurrency is suddenly worth it a lot less than it was.
Here’s an extremely funny phrase from Reuters†
Old, non-laundered North Korean crypto holdings controlled by New York-based blockchain analytics firm Chainalysis, including funds stolen in 49 hacks from 2017 to 2021, have fallen in value from $US$ since the start of the year. 170 million to $65 million. told Reuters.
That’s a total loss of 61 percent for those of you who keep track of at home. Crypto from a 2021 heist has lost at least 80 percent of its value, an analyst at TRM Labs said Reuters† North Korea, which has asked for comment at its embassy in London, has called this “totally fake news,” which is: lol, lmao.
North Korea has been somewhat isolated from the normal financial system due to… circumstances… that have made it more difficult to work on its nuclear program. In 2019, Virgil Griffith, who once worked for the Ethereum Foundation, traveled to North Korea for a cryptocurrency conference, where he explained how to use cryptocurrency to evade sanctions. In photos from this visit, Griffith was standing in front of a whiteboard. On the whiteboard: a smiley face with “No penalties yay.” Griffith was eventually sentenced to more than five years for violating sanctions.
The problem for North Korea is much the same as it is for any hacker: North Koreans have to convert their stolen cryptocurrency into real money, fiat currency, in order to use it. The problem with the fencing of stolen goods is that the thief is unlikely to get face value — so North Korea’s actual earnings from cybercrime were already less than they appeared to be, even before the line broke.
But less money is not no money. Despite conversion issues, North Korea used cyber-attacks to generate about $2 billion for its weapons program in 2019, according to Reuters† Not a word about smiley faces.