Is North Korea Boosting Bitcoin?
Bitcoin has definitely made it to the big time in 2017 as mainstream media ran reports and televised debates on the meteoric rise of the world’s number one cryptocurrency. Speculators and observers have put forward suggestions on what has caused these price surges, and one of them has been North Korea’s estranged leader, Kim Jong-un.
Although markets have corrected somewhat, Bitcoin has still seen gains of around 1600% since this time last year when it traded at just over $800. There has been a lot of speculation over the reasons for this gain, including the growing fervor among investors and anticipation of broader uses for digital currencies in the near future.
According to reports, international sanctions on North Korea to derail its nuclear program have resulted in the regime seeking “side businesses” to gain additional funding. These could include drug trafficking, endangered species trading, money laundering, currency counterfeiting, cyber piracy, and cryptocurrency theft. To function, the system needs to gain access to cryptocurrencies, then pump up the prices to maximize its returns. Finally, it needs to dispose of its crypto and receive the hard currency the regime so desperately desires, according to TechCrunch.
Opening an exchange account would not work for a country that is essentially bankrupt, so North Korea would need to use its skills pool to steal virtual currencies from around the world. It has been surmised that the regime was behind a number of recent hacks orchestrated to steal Bitcoin.
Hacking the South
Spearphishing campaigns targeting Bitcoin traders, a series of hacks on the Youbit South Korean exchange, and other hacks on South Korean targets may all have been orchestrated by the North Korean government. TechCrunch says that North Korea is
Actively hacking the bitcoin and cryptocurrency ecosystem in a push to gain as much cryptocurrency for the regime as possible.
Once enough crypto has been acquired, the regime would need to convert it back into real currency to realize its gains. Cyber security researchers have determined that the country’s Lazarus Group has been behind a number of bank and crypto exchange hacks in recent months. So much so that the South Korean government has been forced to implement more regulation over exchanges within the country.
The twist is that North Korea, through their efforts, is helping to pump up the value of Bitcoin. Almost 80% of all global Bitcoin trading by the end of November was occurring in Japan, South Korea, and Vietnam. As North Korea is increasing uncertainty through its nuclear weapon programs and other acts of espionage, not to mention increasing the public’s distrust of centralized financial authorities by hacking state banking, people in the region are turning in record numbers to cryptocurrency as an alternate economic system. The result is that North Korea and Kim Jong-un gain more funds when liquidating their cryptocurrency.
It is unlikely that we will find out how much crypto Kim Jong-un actually holds. What is likely is that his regime and the region in general have had a huge role in Bitcoin’s spectacular growth in recent months.
Is North Korea good for Bitcoin prices? Let us know your thoughts in the comments below.
Images courtesy of Wikimedia Commons, Pixabay, and Bitcoinist archives.