Time’s Up: Cryptocurrency Has Become a National Security Issue

Rather than issuing largely symbolic sanctions on North Korea whenever there is a major Pyongyang-affiliated hack, U.S officials should focus their efforts on regulating the entire cryptocurrency industry. Last month, the FBI announced that North Korean hackers had stolen more than $600 million in cryptocurrency from an online gaming company, Axie Infinity, in March 2022. The North Korean hacker unit, the Lazarus Group, has recently focused its cyberattacks on blockchain technologies, stealing an estimated $1.75 billion worth of cryptocurrency in recent years. North Korea’s cyber operations have been well documented in recent years, and the Lazarus Group itself has been heavily sanctioned by the U.S Treasury Department. However, questions remain about how Pyongyang’s cyber agents transfer stolen cryptocurrency into fiat currency for the Kim family regime. There are also allegations that Pyongyang uses stolen digital currency to bolster its nuclear arsenal. If these allegations are true, international sanctions have done little to stem the cryptocurrency-funded advancement of North Korea’s nuclear program. Instead, a tailored securities regulation plan to stem North Korea’s money laundering scheme should be implemented by the United States and its allies.

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