- A new report reveals that North Korea has increased its mining of Monero 10 times since May 2019.
- Monero mining is more attractive than Bitcoin mining for North Korea. Main reason: low processing power requirement and anonymity.
A report by the research firm Recorded Future looks in depth at North Korea’s activities with cryptocurrencies. The report, titled How North Korea Revolutionized the Internet as a Tool for Rogue Regimes, studies the methods the Asian country employs to use the Internet as a resource and a means to acquire other resources, people with skills in certain areas of interest, and black markets.
Monero displaces Bitcoin as North Korea’s main resource
The report concludes that Monero is of greater value to North Korea than Bitcoin. Since May 2019 the country has increased its mining activities of Monero 10 times. According to the research, this is because Monero is less demanding on processing power and offers anonymity. This last feature of the cryptocurrency is crucial to the country’s operations.
North Korea is one of the most heavily sanctioned countries in the world. According to the report, cryptocurrencies and the Internet have become North Korea’s most valuable tool for evading sanctions imposed by the United States and the United Nations Security Council:
We assess that cryptocurrencies are a valuable tool for North Korea as an independent, loosely regulated source of revenue generation, but also as a means for moving and using illicitly obtained funds.
The main Internet provider of the Asian country is the Russian company TransTelekom. Since September 2019, the North Korean subnet has been transferred in its entirety from the Chinese company Unicom to its russian partner. In addition, the report found that there has been a progressive increase in North Korean bandwidth capacity since October 2017. From these findings, the following conclusion is drawn:
Internet is no longer simply a fascination or leisure activity, but has become a critical tool for North Korean leaders.
North Korea has established 3 main sources of income from the Internet. About its operations with cryptocurrencies, the report states that the country has funds in at least Bitcoin, Litecoin and Monero. These funds have been acquired through cyber attacks, generation and mining. Bitcoin mining remained constant throughout 2019 and represents a portion of North Korea’s mining activities.
Monero mining, as mentioned, represents the largest portion and has been increasing during 2019. In comparison, in 2018 the mining activities of Monero and Bitcoin were similar.
The increase of mining activity in Monero is recorded at its high performance port 7777. Therefore, there is speculation that North Korea is using high-capacity machines at a higher hash rate. However, the report was unable to determine the specific hash rate of the mining activities. The report speculates the following:
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(…) the activity is proxied through one IP address, which we believe hosts at least several unknown machines behind it.
Monero’s complete anonymity and its unspecified machine mining design have made this privacy currency a vital asset to the North Korean regime.
North Korean cyber attacks
The Record Futures report also points out the different methods North Korea uses to attack users and steal cryptocurrencies. From the use of fake pages, to the creation of malicious “trading” applications and the creation of Telegram chats to infect equipment. North Korea’s cyber-attack techniques have become more sophisticated and the revenue they bring to the government is estimated in millions.