North Korea Lost Millions of Dollars After Stolen Cryptocurrency Wiped Out, Putting Pressure on Pyongyang's Escalating Nuclear Program

Bitcoin has lost almost 54% of its value this year, endangering a crucial source of income for North Korea and its nuclear projects.

According to digital investigators, millions of dollars in cash stolen by the sanctioned countries have been wiped out owing to the poor performance of bitcoin marketplaces. Although cryptocurrencies are projected to account for only a small fraction of North Korea's economy, they serve an 'extremely crucial' function.

North Korea's Cryptocurrencies

Because of widespread international restrictions related to its nuclear program, the government has limited access to global trade and other sources of wealth, making crypto heists appealing. Cyberattacks have become "absolutely vital" to Pyongyang's capacity to circumvent sanctions and earn funds for its nuclear and missile programs, according to Eric Penton-Voak, coordinator of the United Nations panel of experts that monitors sanctions.

North Korea was alleged to have raised an estimated $2 billion for its weapons of mass devastation programs through cyberattacks in 2019. The rapid drop in crypto prices, which began in May amid a larger economic slowdown, hinders Pyongyang's ability to profit from that and other heists and may influence how Pyongyang plans to fund its weapons programs, according to two South Korean government officials.

It comes as North Korea conducts a record number of missile launches this year, which the Korea Institute for Defense Analyses in Seoul believes has cost up to $620 million and prepares to resume nuclear testing amid an economic crisis, Daily Mail reported.

Will Bitcoin Crash Affect North Korea's Nuclear Program?

According to Reuters, North Korea is subject to international sanctions due to its nuclear program, limiting its access to global trade and making cryptocurrency heists more appealing.

Eric Penton-Voak, a coordinator of the United Nations panel of experts responsible for monitoring sanctions, said cyberattacks are "absolutely vital" to North Korea's capacity to circumvent sanctions and collect funds for its nuclear and missile programs.

North Korea gained an estimated $2 billion in revenue via cyberattacks in 2019 for its weapons of mass devastation development.

The Federal Bureau of Investigation accused two North Korean hacker gangs in April of being responsible for a $620 million bitcoin crime against the Ronin Network, which runs the blockchain-based game Axie Infinity (AXS). That hack would be worth $230 million today, but North Korea apparently exchanged nearly all of the proceeds for Bitcoin.

Chainalysis said North Korea's old unlaundered cryptocurrency holdings, spanning 49 hacks from 2017 to 2021, have declined to $65 million from $170 million since the year began. Since the year began, Bitcoin and Ethereum (CRYPTO: ETH) have plunged 57.3% and 69.5%, respectively, according to Benzinga via MSN.

North Korean Hackers Attack US Company

Meanwhile, North Korea's state-sponsored Lazarus Group is suspected of being behind the recent $100 million cryptocurrency theft from a US blockchain company, the latest in a string of high-profile cyber heists from the Kim Jong-un regime, according to Elliptic, a London-based blockchain analytics firm.

The investigation comes a week after California-based crypto business Harmony officially stated on June 24 that unidentified hackers had stolen cryptocurrency totaling about $100 million from the company's Horizon Bridge, a blockchain bridge.

The service, also known as a cross-chain bridge, joins two blockchains and allows users to move cryptocurrencies such as Binance chain, bitcoin, and Ethereum across them.

Binance coin, Ethereum, tether, and wrapped bitcoin were among the stolen coins. According to Elliptic, the hacking gang instantly converted a large portion of the crypto assets into a total of 85,837 ethers by exploiting Uniswap, a decentralized exchange system that operates on the Ethereum blockchain.

Given that the platform allows users to discreetly swap cryptocurrencies with one another without a centralized middleman or using order books, decentralized exchanges are often utilized by hackers to launder cryptocurrencies and evade confiscation of stolen assets, as per Korea Herald.