North Korea Stole $2 Billion in Crypto and Fiat to Fund Weapons Programs

Seen by Reuters, the report – researched by “independent experts” and presented to the U.N. Security Council North Korea sanctions committee last week – says that North Korea has used “widespread and increasingly sophisticated” hacks to collect roughly $2 billion, which is laundered over the web.

The experts are reportedly looking into “at least 35 reported instances of DPRK actors attacking financial institutions, cryptocurrency exchanges and mining activity designed to earn foreign currency” in around 17 nations. Many of North Korea’s hackers operate under the Reconnaissance General Bureau, an intelligence agency that handles clandestine operations.

North Korea is funding its weapons of mass destruction with cryptocurrency and fiat currency stolen from banks and exchanges, according to a confidential U.N. report.

Reuters said the North Korean mission to the United Nations did not comment when asked about the report.

The U.N. report said targeting crypto exchanges allowed North Korea “to generate income in ways that are harder to trace and subject to less government oversight and regulation than the traditional banking sector.”

U.S. president Donald Trump has met with North Korean leader Kim Jong Un several times in a bid to persuade the country to drop its nuclear weapons program.

Reuters said it asked a U.S. State Department spokeswoman about the U.N. report, and received the response:

“We call upon all responsible states to take action to counter North Korea’s ability to conduct malicious cyber activity, which generates revenue that supports its unlawful WMD and ballistic missile programs.”

Previous reports have linked North Korea to major hacks at crypto exchanges.

A South Korean agency pointed the finger at its neighbor back in  2018 saying that domestic exchanges had been attacked with the loss of billions of won. It was investigating at the time if the rogue nation was behind the massive hack of Japan’s Coincheck exchange, which led to the theft of more than $500 million in cryptocurrency.

More recently, North Korean hackers were said to have been targeting users of the UPbit exchange with  phishing email campaign.

North Carolina Congressman Reintroduces Crypto Tax Bill

A tax bill aimed at refining the Internal Revenue Service’s treatment of cryptocurrencies has moved to the U.S. House of Representatives Ways & Means Committee.

The Virtual Value Tax Fix Act, first legislators first proposed last Congressional session, has been reintroduced by North Carolina’s Rep. Ted Budd (R) on July 25. In what Budd calls a national security issue, the bill would effectively end the double taxation on cryptocurrency transactions by amending 1986’s Internal Revenue Code.

Under the 1986 Code, gains and losses in transactions of real property of like-kind remain unrecognized. As Rep. Budd stated before an introduction of the bill in June, the code places a 40 percent tax rate on transactions. Budd says tax concerns and transaction record-keeping act as a deterrent to adoption.

“The use of digital assets is already treated as a sale of the asset, even though the economic reality of the transaction is a purchase of a simple consumer good”, Budd said.

If passed, the act would free cryptocurrency transactions from double taxation and record-keeping immediately.

Budd’s newest bill adds to other cryptocurrency legislation before Congress. In early July, Rep. Tom Emmer (MN-R) reintroduced the “Safe Harbor for Tax Payers with Forked Assets Act of 2019.” Emmer says the bill will bring clarity on taxable events following cryptocurrency forks and airdrops.

Rep. Budd’s legislation joins fellow North Carolina Representative Patrick Henry’s enthusiasm for cryptocurrency, particularly bitcoin. “I think there’s no capacity to kill Bitcoin”, Henry said speaking in preparation for Facebook’s Libra hearings prior to the U.S. House and Senate Committees,

“My point is: you can’t kill Bitcoin”, he said.

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