North Korea Launching Cryptocurrency

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North Korea is expanding its empire of illegal activities to the realm of blockchain and cryptocurrency. As first reported by Vice News, North Korea held its first blockchain and cryptocurrency conference in April 2019.

Leading the public relations for North Korea is Alejandro Cao de Benos. A noted spokesperson for the regime and a Spanish national, Cao de Benos has been outwardly vocal. He is promising that North Korea will provide its own bitcoin style offering.

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The Early Stages

While developing this cryptocurrency, North Korea itself still struggles to thwart cripping international sanctions.

Currently there is no name for the cryptocurrency. Cao de Benos notes that:

“We are still in the very early stages in the creation of the token. Now we are in the phase of studying the goods that will give value to it,” said Cao de Benos, adding that there are “no plans to digitize the [North Korean] won for now.”

Experts on the regime’s use of cryptocurrencies have concerns that North Korea already has the expertise needed to build and deploy its own cryptocurrency that could help the North Koreans avoid US and international sanctions. In addition, this cryptocurrency is likely to support their money laundering and black market activities. These illegal activities are necessary to financially support the current totalitarian regime.

North Korea also uses bitcoin as a preferred currency for ransomware attacks on the Western institutions. However developments in tracking bitcoin have likely pushed the regime towards exploring new cryptocurrency innovations.

North Korean Criminal Enterprises

Last year, the Diplomat reported that the North Korean focus  on technology is not for the general benefit of the people. The regime is primarily focus on technology that allows “high anonymity, difficulty in tracking funds, and easy cash flow,” all of which makes it ideal for a nation that has been accused of illicit activities ranging from the drug trade and counterfeiting to human trafficking and arms sales.

In addition, Pyongyang’s infamous state-sponsored hackers have helped amass more than $2 billion in fiat and digital currency in recent years to help pay for the country’s weapons program, according to a U.N. report seen by AP last month — a claim Pyongyang subsequently denied.

The regime’s interest in the blockchain is also beyond just stealing bitcoin. In 2018, Jonathan Foong Kah Keong, a captain based in Singapore according to his now-defunct LinkedIn profile, who the U.N. says has been helping North Korea evade sanctions since 2013, established a company in Hong Kong called Marine Chain that sold digital tokens in exchange for partial ownership of maritime vessels.

In 2017, Pyongyang University of Science and Technology began offering undergraduates a crash course in cryptocurrencies and blockchain. Federico Tenga, the Italian founder of bitcoin startup Chainside, traveled to Pyongyang to teach more than three dozen of the country’s elite students about bitcoin and blockchain technology that underpins it.

Cao de Benos – Blockchain Obsession

Experts are also noting that this announcement could lead to a failed endeavor such as the Venezuela – Petro coin. At a minimum, the announcement by Cao de Benos is propaganda to show North Korea’s technological abilities.

To mask the goal of using cryptocurrency for criminal enterprises, Cao de Benos is claiming that foreign companies are signing contracts with the North Korean government. Their main goals are according to the government: to develop blockchain systems in areas like education, medicine and finance. Presently it is unknown what foreign companies are seeking financial contracts with North Korea.

It is important to note that Cao de Benos is a noted figure. He is the only westerner known to be publicly working for the North Korean regime. Continually he gains attention for publicly wearing North Korean military uniforms. He was pivotal in the launching of North Korea’s first website in 2000.

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In addition, Cao de Benos continually earns rewards from North Korea’s government including citizenship and titles. He also serves as a English speaking spokesperson for the rogue nation.  Furthermore, he was also arrested for possessing unlicensed firearms in Spain in 2016.

February Conference

Last week, Cao de Benos announced the second blockchain conference scheduled for February 2020. Notably as with the conference in April 2019,  it will exclude journalists from attending the event.

Presently, North Korean officials are not revealing who will be attending this blockchain conference next February. Notably, experts believe that Russian officials could have a significant presence. Currently both nations share a goal of thwarting U.S. dominance of financial markets.

Edward Maggio is the Editor in Chief for Business Blockchain HQ. He is an author, attorney and blockchain expert who uses his knowledge of commercial transactions and project management to support blockchain endeavors in Washington D.C. and New York City.

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