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North Korea’s affiliation with cryptocurrencies

The numerous varying reports across the world regarding Kim Jong Un’s current health condition, have led a small few in the cryptocurrency community to believe that Kim Jong Un’s death could cause a subsequent mass BTC sell off. The rumors were likely circulating because of the DPRK’s ( Democratic People’s Republic of Korea) relationship with Bitcoin.

Why do DKRP own Bitcoin?

The main reason for the DPRK to have significant Bitcoin holdings, is to evade sanctions issued by numerous political bodies and states across the globe. These have been issued due to country’s ongoing nuclear weapons program; one example is the European Union banning the trade of precious metals, gold and diamonds with the DPRK.

The various sanctions implemented have had varying effectiveness, although have not had the end game goal of shutting down the DPRK’s nuclear weapons program. One of the reasons behind the DPRK being able to continue their program, is because of the increasing cryptocurrency / cyber theft abilities and mid sea cargo transfers of the State. The DPRK owns a substantial amount of BTC, with estimated figures ranging from $650,000,000 (84,000 BTC) to $2,500,000,000 (323,000 BTC).

How did North Korea obtain their cryptocurrencies?

The State did not buy the cryptocurrencies, they instead acquired Bitcoin through numerous cyberattacks against various targets across the world. They therefore stole the cryptocurrencies from an array of financial institutions. For example, it was reported that the DPRK was responsible for the 2017 Youbit hackings. The exchange was subject to two hacks with around 17% of the company’s cryptocurrency – around 4,000 BTC (30,988,000.00 USD at time of writing). North Korea is also a suspected perpetrator for the Mt Gox hack of 2014 and the XEM hack of 2018.

The State has also obtained XMR (Monero) through mining projects set up in the country. It likely sees XMR as the preferable currency for transactions over BTC due to its low traceability and intense privacy.

Would North Korea sell their BTC if Kim Jong Un died?

It is extremely unlikely the Hermit Kingdom would sell their BTC; this is due to their reliance on the cryptocurrency. If the DPRK sold their Bitcoin, they would lose a source of funding for their nuclear weapon project. The funding of their weapons program and underhand monetary action, are seen as vital for the survival of the North Korean state. We also have to take into account the difficulty North Korea may have when selling their cryptocurrency.

The DPRK would additionally have more pressing issues on their mind if Kim Jong Un died. The first being finding the replacement for Kim Jong Un. The leader’s sister,Kim Yo-Jong, appears most likely to take the reins of DPRK if the rumours of Kim’s death had been true. Due to the country having a pyramid-like power structure, change at the top would likely cause changes across the board. The DPRK would not have the destruction of the Bitcoin price at the top of their agenda.

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