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Crypto Nosedive Threatens North Korea's Stolen Funds As It Ramps Up Weapons Tests

The sudden plunge in crypto values, which started in May amid a broader economic slowdown, complicates Pyongyang's ability to cash in on that and other heists, and may affect how it plans to fund its weapons programmes

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The crypto markets crash has wiped out millions of dollars in funds stolen by North Korean hackers, four digital investigators say, threatening a key source of funding for the sanctions-stricken country and its weapons programmes.

North Korea has poured resources into stealing cryptocurrencies in recent years, making it a potent hacking threat and leading to one of the largest cryptocurrency heists on record in March, in which almost USD 615 million was stolen, according to the US Treasury.

The sudden plunge in crypto values, which started in May amid a broader economic slowdown, complicates Pyongyang's ability to cash in on that and other heists, and may affect how it plans to fund its weapons programmes, two South Korean government sources said. Reuters sources declined to be named because of the sensitivity of the matter.

It comes as North Korea tests a record number of missiles - which the Korea Institute for Defense Analyses in Seoul estimates have cost as much as USD 620 million so far this year - and prepares to resume nuclear testing amid an economic crisis.

Old, unlaundered North Korean crypto holdings monitored by the New York-based blockchain analytics firm Chainalysis, which include funds stolen in 49 hacks from 2017 to 2021, have decreased in value from USD 170 million to USD 65 million since the beginning of the year, the company told Reuters.

One of North Korea’s cryptocurrency caches from a 2021 heist, which had been worth tens of millions of dollars, has lost 80 per cent to 85 per cent of its value in the last few weeks and is now worth less than USD 10 million, said Nick Carlsen, an analyst with TRM Labs, another US-based blockchain analysis firm.

(Reuters)



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