Experts: North Korea Adopts the Crypto Route To Circumvent International Sanctions
Two Washington-based experts have recently claimed that North Korea is using digital assets to circumvent international sanctions levied by the United States and other countries. The two researchers presenting this latest study are Ross Delston and Lourdes Miranda.
Ross Delston is an independent American Attorney specializing in anti-terri financing and anti-money laundering issues. While Lourdes Miranda is a financial crime investigator and intelligence analyst.
The two researchers first spoke to the Asia Times while explaining the complete story in detail. They said that crypto assets have proved to be saviour for international criminal and the Democratic People’s Republic of Korea (DPRK) is no different.
They also added the DPRK is taking the crypto-advantage to circumvent sanctions “by using multiple international exchangers, mixing and shifting services – mirroring the money laundering cycle – to exploit international financial institutions that have correspondent banking relationships with the United States.”
The two researchers also talked about the possibility that DPRK could develop its own cryptocurrency and blockchain to manipulate public record of transactions. They said “DPRK can create their own crypto-currencies or use established ones like Bitcoin. Having their own crypto-currency would also facilitate their ability to open online accounts under the guise of a non-adversarial nation using anonymous communication to conceal the user’s locations and usage on the internet.”
However, it remains to be seen how far DPRK can be successful in this idea of having its own cryptocurrency knowing the fact that very few nations are interested in doing business with the sanctions-laden country. More importantly, we already have an example of Venezuela and its failed attempt for its own digital currency Petro.
The two researchers also claimed that DPRK will also open its own wallets and virtual bank accounts which have limited or no Personally Identifiable Information (PII) requirement. They said: “For example, DPRK could open an online wallet using a Russia-based service, transfer its crypto-currency into a Bulgaria-based wallet service and then transfer it again into a Greece-based wallet service, all through anonymous communication and using their own blockchain.”
The researchers said that by doing so, DPRK can achieve two objectives here.
“(First, in order to) avoid AML/CFT scrutiny from European financial institutions that have US correspondent banking relationships, DPRK could hire people to act as nominees who have legitimate PII to open wallets to receive, store and transfer DPRK-disguised crypto-currency,” they said.
“(Second) once the DPRK miners transfer the crypto-currencies into multiple European wallets that appear to come from legitimate sources, the money laundering can begin by mixing, shifting and exchanging crypto-currency into US financial institutions.”