The Korean peninsula is rife with social and political differences ever since the Korean mainland was split between North and South Korea after the Korean War.
According to a report released by The Royal United Services Institute [RUSI], North Korea could target Southeast Asia’s vulnerable crypto-sector.
In the face of universal condemnation and sanctions over its domestic policies and nuclear program, North Korea has had to take extreme measures to raise funds and bypass these sanctions. One of the ways North Korea attempted to do so was through the use of cryptocurrencies and their underlying technology.
Cryptocurrencies have, as of now, played a negligible role in North Korea’s fundraising. However, UN Security Council’s Panel of Experts suggests that virtual assets offer North Korea “more ways to evade sanctions given that they are harder to trace”.
According to the report, countries across the Southeast are vulnerable to systematic risks as their regulatory approaches are weak, something North Korea can take advantage of. These systematic risks are based on the fact that Southeast Asia’s digital sector has a lack of coordinated regulations, the report stated.
The WannaCry ransomware attack, where hackers demanded about $300 in Bitcoin within 3 days or $600 within 7 days, was reliably attributed towards North Korea.
The attack indicated that North Korea’s capability to exploit weaknesses was more prominent than previously imagined. If North Korea continued to suffer under the strain of international sanctions, Southeast Asia must prepare for a “sustained security challenge”, the report said.
The report also cited the growing number of crypto-users in the region,
“Because Southeast Asia is also host to a growing number of cryptocurrency businesses and users, countries in the region could prove vulnerable to North Korea’s cryptocurrency-related activity as well.”
Countries in Southeast Asia must undertake risk assessments to identify key vulnerabilities and reduce its vulnerability to cyber-crimes related to cryptocurrency, the report said.
The report continued,
“If carried out with the appropriate urgency and in line with global standards, countries in the region can succeed in making themselves less vulnerable to the risks of North Korean cryptocurrency activity.”
However, the report also noted the fact that Malaysia, Philippines, and Thailand were working towards coordinated regulations for cryptocurrency exchanges, under the guidance of the intergovernmental Financial Action Task Force.
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