Allegations escalate: Former NSA official says North Korea is using cryptocurrency to fund nuclear program

Unsurprisingly, North Korea is refusing to give up its nuclear program in the face of U.S. sanctions — and a former senior NSA official believes cryptocurrency is to blame.

North Korea’s Cryptocurrency Industry

The United States wants to cut off North Korea’s economic resources and force it to cooperate in its nuclear weapons and missile programs. However, reports indicate that the authoritarian state is using Bitcoin and other cryptocurrencies to circumvent economic barriers.

Priscilla Moriuchi, a former senior NSA official, recently spoke out about North Korea’s use of cryptocurrencies, saying the country has earned at least $200 million converting cryptocurrencies into cash.

While the money is not enough to support North Korea's nuclear program, it won't hurt. Moriuchi said:

My bet is that some of this cryptocurrency is being exchanged for something else — money or physical goods — to support North Korea’s nuclear program.

North Korea dominates the race

Most cryptocurrencies are built on anti-establishment ideals. They are decentralized, secure, and anonymous — making them an easy tool for closed countries that are socially and economically isolated from the rest of the world. Moriuchi explained:

This is a perfect platform for countries such as North Korea that have long been isolated from the international financial system to adopt this new type of transaction model that is currently outside the regulatory control of the country.

It is not illegal

While North Korea may be using cryptocurrencies to circumvent U.S. economic sanctions, it does not appear to be breaking the law. Moriuchi said:

But it's not illegal, unlike other things North Korea does to generate revenue: counterfeiting dollars, producing fake tobacco, and selling wildlife and drugs.

However, how North Korea handles the funds converted from cryptocurrencies to fiat currency is another matter. Moriuchi said:

However, North Korea has a large criminal network that has been used to handle illegal activities for decades. If Pyongyang is able to exchange cryptocurrency for physical currency, it would be easy to transfer the money into the country or use it to buy things.

Regardless, it is not cryptocurrencies that are to blame for their presence in North Korea’s illegal activities.