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Report: North Korea Using Cryptocurrency to Fund Weapons of Mass Destruction Programs

North Korea is actually getting a significant amount of money through cryptocurrency and they are getting it outside of the traditional financial system

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cryptocurrency, weapons
FILE - Representations of the Ripple, Bitcoin, Etherum and Litecoin virtual currencies, Feb. 13, 2018. Switzerland's government wants to look into the feasibility of launching its own state-backed cryptocurrency. VOA

North Korea is using cryptocurrency markets to evade global sanctions and is likely using the virtual money to fund its weapons of mass destruction programs, according to a new report from the London-based Royal United Services Institute (RUSI). The report recommends regulators take urgent steps to counter the threat.

Pyongyang is subject to wide-ranging international sanctions following a series of nuclear tests and long-range missile launches on recent years. The reclusive state is seeking ways to raise money and bypass those sanctions — and emerging cryptocurrencies could become a key lifeline for the regime, says report co-author Kayla Izenman.

“North Korea is actually getting a significant amount of money through cryptocurrency. And they are getting it outside of the traditional financial system, which is the one that most people think about when they’re thinking about how a weapons of mass destruction program might be financed,” says Izenman.

Many cryptocurrency exchanges ban North Korean users. Pyongyang is accused of numerous hacking operations get around these measures. In one December 2017 attack on South Korea’s Bithumb exchange, it is claimed North Korea hackers stole Bitcoin and Ethereum virtual currencies then worth $7 million.

While cryptocurrency currently plays a minor role in Pyongyang’s financial activities, RUSI’s Izenman says the reclusive state has the capacity to exploit weaknesses in global regulation.

“It’s a national security threat and will just increase in the time to come. Cryptocurrency, especially if you’re using coins such as ‘Monero’ or ‘Zcash’ that that are privacy coins that aren’t as transparent as ‘Bitcoin’, can be used and traded, and they don’t need to go through the fiat system, they don’t need to touch the dollar, they don’t need to touch a bank.”

cryptocurrency
The report authors warn that southeast Asia’s burgeoning cryptocurrency industry is particularly vulnerable as regulators are struggling to keep up with the technology. Pixabay

The report authors warn that southeast Asia’s burgeoning cryptocurrency industry is particularly vulnerable as regulators are struggling to keep up with the technology.

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“Most of the hacks that North Korea has been involved in have been in southeast Asia. And most of their sanctions evasion work has also been in southeast Asia. So we’re hoping to help improve regulation in the region. That being said, given that cryptocurrency is inherently a borderless type of system, it’s imperative that everyone be aware of this,” Izenman adds.

Meanwhile, North Korean leader Kim Jong Un arrived Wednesday in Vladivostok for a summit with his Russian counterpart Vladimir Putin — where the ongoing sanctions against Pyongyang are likely to be high on the agenda. (VOA)

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Trump Defends Kim, Downplays Concern About North Korea

U.S. President Donald Trump and his national security adviser are publicly at odds about the seriousness of the threat

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Trump, Kim, North Korea, Defends
Japan's Prime Minister Shinzo Abe welcomes U.S. President Donald Trump upon his arrival at Mobara Country Club in Mobara, Chiba prefecture, Japan, May 26, 2019. VOA

U.S. President Donald Trump and his national security adviser are publicly at odds about the seriousness of the threat currently posed by North Korea.

In a Sunday morning tweet from Tokyo, Trump issued a retort to John Bolton who the previous day here had told reporters that there was “no doubt” North Korea’s recent test firing of short-range ballistic missiles violated a United Nations resolution.

Bolton’s remark was the first by a U.S. official describing the North Korean launches as a violation of U.N. resolutions.

“North Korea fired off some small weapons which disturbed some of my people and others, but not me,” said Trump in his tweet.

Trump, Kim, North Korea, Defends
U.S. President Donald Trump and North Korea’s leader Kim Jong Un meet during the second U.S.-North Korea summit at the Sofitel Legend Metropole hotel in Hanoi, Feb. 28, 2019. VOA

But some analysts say the missile launches are indeed a concern.

“It’s pretty clear the missile launch was a violation of U.N. sanctions, whatever the range. The reality is that U.S. forces and civilians in South Korea and Japan are already in range of North Koreans missiles, so accepting shorter or mid-range missiles puts the United States at risk, not to mention our allies Japan and the Republic of Korea,” Kevin Maher, a Washington security consultant and a former head of the State Department’s Office of Japan Affairs, told VOA. “These realities are inconvenient if the objective is to show a personal relationship with the dictator Kim Jong Un will stop North Korea’s continuing nuclear and missile programs.”

The U.S. president also expressed confidence the North Korean leader “will keep his promise to me” in moving toward denuclearization.

In the tweet, Trump also said he smiled when Kim called former U.S. Vice President Joe Biden “a low IQ individual.”

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The initial presidential tweet misspelled the Democratic Party presidential contender’s name as “Bidan” and was later replaced. And it was not Kim who made the disparaging remark about Biden, rather an unsigned commentary carried by North Korea’s central news agency, which referred to the American politician as a “fool of low IQ” and an “imbecile bereft of elementary quality as a human being.”

Trump concluded his tweet by stating that perhaps Kim was trying “to send me a signal” — apparently a reference that the leader in Pyongyang prefers to negotiate with the current American president over the opposition party’s top-polling contender.

Trump and Kim have held two summits, in Singapore and Hanoi. Neither has led to any significant breakthroughs, although the meetings were seen as reducing tensions between the two countries, which have no diplomatic relations and whose leaders had never met before.

The United States and North Korea were belligerents in a three-year war in the early 1950s that devastated the Korean Peninsula. It ended with an armistice, but no peace treaty has ever been signed.

Bolton comment

Bolton, who 13 months ago replaced retired Army General H.R. McMaster as the president’s national security adviser, is known as a hardliner who distrusts Pyongyang’s intentions.

Trump, Kim, North Korea, Defends
U.S. President Donald Trump and Japan’s Prime Minister Shinzo Abe play golf at Mobara Country Club in Mobara, Chiba prefecture, Japan May 26, 2019, in this photo taken by Kyodo. VOA

North Korea has a long track record of violating international agreements and has repeatedly defied U.N. sanctions against its nuclear weapons and ballistic missile programs.

Trump fired off his tweet shortly before taking a helicopter from Tokyo to the Mobara Country Club in nearby Chiba prefecture.

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Japanese Prime Minister Abe, dressed in a blue blazer and white pants, rolled up in a golf cart to meet Trump, who was wearing a red jacket and carrying a red hat in his hand.

After some hours on the golf course, the two leaders viewed bouts of sumo before the U.S. president awarded the large and heavy President’s Cup (quickly nicknamed the Trump Cup’) to champion Asanoyama, a 177-kilogram (390-pound) wrestler who clinched the Summer Grand Tournament the previous day.

Trump, Kim, North Korea, Defends
U.S. President Donald Trump prepares to present the President’s Cup to wrestler Asanoyama, the winner of the Summer Grand Sumo Tournament at Ryogoku Kokigikan Sumo Hall in Tokyo, May 26, 2019.U.S. President Donald Trump prepares to present the President’s Cup to wrestler Asanoyama, the winner of the Summer Grand Sumo Tournament at Ryogoku Kokigikan Sumo Hall in Tokyo, May 26, 2019. VOA

“That was an incredible evening at sumo,” Trump told reporters as he and first lady Melania Trump joined Prime Minister and Mrs. Abe for dinner at a Tokyo restaurant where the food is served on long paddles. Trump said he personally “bought that beautiful trophy, which you’ll have hopefully for many hundreds of years.”

Trump on Monday meets Japan’s new emperor, Naruhito, who hosts a state dinner for the visiting president that evening. In between, Trump holds a formal meeting with Abe in which they are expected to discuss trade and defense matters.

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No quick breakthrough on trade is expected, although both leaders have expressed a desire for a bilateral trade pact after Trump pulled the United States out of the comprehensive 12-nation Trans Pacific Partnership, which Tokyo had spearheaded with Washington under Trump’s predecessor, Barack Obama.

Following the golf outing, Trump tweeted that no trade deal would be made until after July’s elections for some of the seats in the upper house of Japan’s Diet (parliament).

Trump, Kim, North Korea, Defends
U.S. President Donald Trump, with first lady Melania Trump, receives a plate of food from a chef as they and Japanese Prime Minister Shinzo Abe and his wife Akie Abe have dinner in Tokyo, May 26, 2019. VOA

Later at dinner, the president said, “the prime minister and I talked a lot today about trade and military and various others things. I think we had a very productive day.”

Before Trump departs Japan on Tuesday, he is to visit the naval base at Yokosuka to tour a Japanese helicopter carrier and address American service personnel in conjunction with the U.S. Memorial Day holiday (observed Monday). (VOA)