You would think that dictatorships like North Korea are not so keen on the use of cryptocurrencies, and therefore that they are not so much affected by the crash, but nothing could be further from the truth. North Korea, on the other hand, is very active in crypto, and it would suffer a lot from the crash. Even the country’s nuclear weapons program could therefore potentially be compromised.
North Korea hacks for crypto
That writes Reuters, who spoke to two South Korean government employees. The crash would make cashing out stolen cryptocurrencies more difficult and could affect how it finances its military projects.
In April, it was revealed that the country was behind the largest Ethereum hack to date. State hackers had hacked the Ronin bridge of gaming protocol Axie Infinity, leading to 173,000 ETH and 25.5 million USDC in loot. Converted at that time it was worth more than 600 million dollars. Apparently North Korea is not a HODL, but sells its tokens for other things. Presumably, the country mainly buys back dollars and gold.
However, North Korea also has unsold tokens, according to data from Chainalysis, Reuters writes. This would have been stolen in 49 hacks between 2017 and 2021. These stolen funds were worth $170 million at the beginning of this year, but now it’s just $65 million. One of the positions has lost 80% to 85% of its value in a short period of time, according to Nick Larsen, of the on-chain analytics company TRM Labs. Now it’s only worth $10 million.
†North Korean hacks are fake news
The country will not have fallen on its back and will therefore realize that cryptocurrencies can have quite a lot of potential in the long term. Reuters called the North Korean embassy in London. The country has not responded “because the allegations of North Korean hacks are fake news.”
Behind many of the hacks is said to be the infamous hacker group Lazarus Group. In addition to the Axie Infinity hack mentioned above, these state hackers were also responsible for the infamous WannaCry ransomware†In total, it would have stolen about 400 million dollars in 2021. The single hack of Axie Infinity thus surpassed an entire year’s worth of crime.