North Korea and Cryptocurrency
North Korea Cryptocurrency Laws
Regulation of Digital Currencies: Cryptocurrency, Bitcoins, Blockchain Technology
North Korea regulations or legislation enactment specifically regulating cryptocurrency is unknown. Therefore, the legal status of cryptocurrency in North Korea is controversial. Cointobuy’s analysis tool has ranked Myanmar in the position 201 out of 249 countries in terms of cryptocurrency safety, also the crypto-related action in this country has a 1.6/10 safety rank. [1]
Digital Currency – Blockchains
One of the North Korea’s strategies to evade economic sanctions include cryptocurrency activity. Also, the country is frequently associated with a polemic topic in the international community – the theft of digital currencies. [2]
The Country has been involved in cybercrime for many years, but the hacking of cryptocurrency exchanges is a new category. For example, In 2017 an exchange called “Bithumb” was hacked for around $7million worth of cryptocurrency. In the same year, North Korea was blamed for the hacking of the exchange “YouBit”, which later went bankrupt from losing 17% of its assets. Also, North Korea conducted the WannaCry Bitcoin ransomware attack, earning at least $120,000 worth of Bitcoin in exchange for unlocking victims’ systems. North Korea is a primary suspect in the heist of a coin called NEM from the crypto exchange Coincheck located in Japan. On January 26, 2018, hackers stole $526 million worth of NEM which has since been traced back to North Korea. One international cybersecurity company, Group-IB, published that five cryptocurrency exchange attacks are linked to Lazarus, a North Korean state-sponsored hacking group. [2]
According to Royal United Services Institute in London research at RUSI’s Centre for Financial Crime and Security Studies, North Korea has successfully used cryptocurrencies as a revenue stream and money laundering tool. North Korea’s kingdom reportedly brought in up to $2 billion for those programs with the use of cyberattacks in recent years. In addition, the country started mining, research indicates that the North Korean regime has also been mining cryptocurrency, either to use in illicit transactions today or to hoard for future use. [3]
P.S. Insights on Cryptocurrency Legal Issues
Most jurisdictions and authorities have yet to enact laws governing cryptocurrencies, meaning that, for most countries, the legality of crypto mining remains unclear.
Under the Financial Crimes Enforcement Network (FinCEN), crypto miners are considered money transmitters, so they may be subject to the laws that govern that activity. In Israel, for instance, crypto mining is treated as a business and is subject to corporate income tax. In India and elsewhere, regulatory uncertainty persists, although Canada and the United States are relatively friendly to crypto mining.
However, apart from jurisdictions that have specifically banned cryptocurrency-related activities, very few countries prohibit crypto mining.
Our Freeman Law Cryptocurrency Law Resource page provides a summary of the legal status of cryptocurrency for each country across the globe with statutory or regulatory provisions governing cryptocurrency. The globe below provides links to country-by-country summaries:
Is cryptocurrency legal in North Korea?
Do you have questions about cryptocurrency, digital currencies, or blockchain technology?
Freeman Law can help with digital currencies, tax planning, and tax compliance. Contact us now to schedule a consultation or call (214) 984-3410 to discuss your cryptocurrency and blockchain technology concerns.
[1] Cryptocurrency Analysis, “Ultimate crypto investment safety rankings”, (Jun. 2, 2021).
[2] Clautice, Thomas, “Nation-State Involvement in Cryptocurrency and the Impact to Economic Sanctions” (2019). Economic Crime Forensics Capstones. 43, La Salle University.
[3] Id.
[4] Peck, Morgen E, What North Korea Really Wants From Its Blockchain Conference. IEEE Spectrum (Feb. 13, 2020).
