How will the fall in the cryptocurrency market hurt North Korea’s nuclear programme?
North Korea is a closed country from the rest of the world, which is also one of the leaders in terms of the number of sanctions imposed. Given the difficulties with imports in such a situation, North Korea needs every possible source of income. One of them is stealing cryptocurrencies. Experts report that the country sponsors groups of hackers who have quite successfully stolen hundreds of millions of dollars from various crypto-platforms. However, due to the recent collapse of the crypto market, North Korea’s coin reserves have shrunk significantly. To such an extent that it could even affect the country’s nuclear weapons program. Here’s a more in-depth look at the situation.
We note that conditions in the cryptocurrency market are indeed unpleasant. In particular, Bitcoin fell below $19,000 today and traditionally pulled other assets with it. As a result, the first cryptocurrency’s slide on a 24-hour scale was the equivalent of 5.6 per cent.
This is what the hourly chart of the cryptocurrency looks like.
Bitcoin’s hourly chart
The niche coin’s collapse has been dragging on for a long time, but in June it was particularly tangible. It was in the middle of the month that Bitcoin hit its local bottom at $17,622. So far, the coin has not fallen any lower.
The current situation has caused significant problems for industry participants. In particular, large Bitcoin miners have faced difficulties. As bitcoin mining is making less money on the back of a depressed BTC exchange rate and the increasing complexity of mining, not all giants are able to continue operations in today’s environment. For example, the day before, we told you about the situation of Compass Mining, which has not paid for the electricity it has spent for several months.
As it became known in the middle of the week, the CEO and CFO of the company resigned. According to the company, the reason for this was "numerous failures and disappointments".
Cryptocurrency miner
Some cryptocurrency exchanges are also on the verge of bankruptcy. This information was disclosed by FTX chief Sam Bankman-Fried. However, he did not name the platforms, which are already almost insolvent, but hide it. You can read more of the entrepreneur and billionaire’s comments in a separate article.
How the collapse of the cryptocurrency market is affecting
In February this year, leaked UN documents led to rumours that North Korea’s nuclear weapons programme was predominantly funded by cryptocurrencies. According to Decrypt sources, the day before the rumors were followed up by two anonymous sources within the South Korean government. According to them, “cryptozyme” could undermine progress in North Korea’s nuclear race.
Kim Jong-un in front of the launcher
Crypto is indeed a crucial financial element in the structure of the country’s economy precisely because of sanctions. In April, Eric Penton-Woak of the UN Security Council panel of experts on North Korea said that hacking had been “fundamental to” the country’s ability to circumvent sanctions for years.
The exact amount of the country’s reserves in cryptocurrencies is impossible to calculate, but Chainalysis analysts are confident that the value ranges around $65 million. They came to this conclusion after analyzing transactions closely related to hacking attacks by local cyber groups. By comparison, as recently as earlier this year, North Korea had the equivalent of $170 million in crypto.
Rocket launcher during a parade in North Korea
Nor should we forget the major hacking attack on the Axie Infinity’s Ronin platform. A few months ago, $552 million in Etherium was stolen from it. However, the final amount of funds hitting North Korea after all the transactions could be much lower, TRM Labs analyst Nick Carlsen says. The issue here is both the drop in the price of ETH itself and the costs of “covering their tracks” by hackers in the form of coin transfers between different blockchains.
We think this news somehow proves the enormity of the cryptocurrency industry and the heights it has reached. And while it is unlikely to be good for the reputation of digital assets in this case, they are known all over the world anyway. In addition, it is important to understand that crypto is just a tool that can be used in different ways.
What solution will the North Korean government be looking for now? Look for the answer to that question in our Millionaire Crypto Chat. Discuss any other news from the blockchain world there as well.
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