Cryptocurrency may be getting quietly channeled to N. Korea university as Pyongyang’s financial lifeline
SEOUL — A cybersecurity company said it has found software that appears to install code for mining cryptocurrency and sends any mined coins to a server at a North Korean university, the latest sign that North Korea may be searching for new ways to infuse its economy with cash.
The application, which was created on Dec. 24, uses host computers to mine a cryptocurrency called Monero. It then sends any coins to Kim Il Sung University in Pyongyang, said cybersecurity firm AlienVault, which examined the program.
“Cryptocurrencies may provide a financial lifeline to a country hit hard by sanctions, and as a result universities in Pyongyang have shown a clear interest in cryptocurrencies,” the California- based security firm said in a release, adding that the software “may be the most recent product of their endeavors.”
The company added a caveat that a North Korean server used in the code does not appear to be connected to the wider internet, which could mean its inclusion is meant to trick observers into making a North Korean connection. Kim Il Sung University, however, plays host to foreign students and lecturers, not just North Koreans.
Kim Il Sung University did not immediately respond to requests for comment. Government officials representing North Korea at the United Nations were not immediately available for comment.
Others have flagged increasing signs of North Korean interest in cryptocurrencies and underlying blockchain technology.
“With economic sanctions in place, cryptocurrencies are currently the best way to earn foreign currency in North Korea’s situation. It is hard to trace and can be laundered several times,” said Mun Chong-hyun, chief analyst at South Korean cybersecurity firm ESTsecurity.
Cryptocurrency watchers say technical details of Monero, the 13th- largest crypto asset in the world, according towww. coin market cap. with a total value of more than $7 billion, make it more appealing than bitcoin to those who value secrecy.
Monero funds go to an unlinkable, one-time address generated with random numbers every time a payment is issued. That makes it less traceable than bitcoin, where transactions can be linked to specific, albeit anonymous, private addresses, cybersecurity experts said.
South Korea-based Bithumb, the world’s busiest cryptocurrency exchange, is also the largest Monero trading exchange in the world, with about 24% of trading volume. The next largest were Europe-based exchange HitBTC and Hong Kong-based Bitfinex, as of Monday.
Marshal Swatt, an expert in blockchain technology and financial exchange, said cryptocurrencies’ independence from government regulation — and sanctions — made them logical choices for covert transactions.
“They don’t by themselves discriminate between good and bad actors,” he said. “This makes it extremely compelling for countries like North Korea, Venezuela, Iran, Russia and others to exploit these non-governmental blockchain currencies for their own self-interest.”
Cybersecurity firm FireEye cited in a November blog post a series of North Korean activities against South Korean cryptocurrency targets such as exchanges. Analyst Luke McNamara wrote that “it should be no surprise that cryptocurrencies, as an emerging asset class, are becoming a target of interest by a regime that operates in many ways like a criminal enterprise.”
In early November, Federico Tenga, the Italian co- founder of bitcoin start- up Chainside, posted on his Twitter account pictures and comments on his visit to lecture on bitcoin and blockchain technology at the Westernfunded Pyongyang University of Science and Technology.
“The lectures were at a quite basic level to give a general understanding of blockchain technologies, which are also very relevant to trade, supply chains and other e-business,” a spokesman for the university said.