- Troy Stangarone, senior director at the Korea Economic Institute of America (KEI) stated the implications of FTX’s fall for North Korea.
- Stangarone stated that FTX’s collapse will negatively North Korea.
- As exchanges and regulators tighten security, North Korea’s profits from hacks are likely to come down.
Troy Stangarone, senior director at the Korea Economic Institute of America (KEI), mentioned the implications of the catastrophic fall of FTX for North Korea. In one of the blogs written by Stangarone for The Diplomat, he highlighted that the fall of FTX weakened North Korea’s ability to exploit the weakness that persisted in the cryptocurrency ecosystem.
Stangarone stated that North Korea was largely dependent on profits from cryptocurrency hacks as the country had put the brakes on exports due to its “zero-covid policy.”
He also highlighted the report that was released by Chainalysis, which stated that North Korea looted around $300 million in 2020 and $400 million in 2021. It was also estimated that around $1 billion worth of cryptocurrency has been stolen by North Korea.
Stangarone also stressed the point that, even though the cryptocurrency realm is not new, a lack of proper regulations makes it bait for hackers. In addition, the use of mixers to conceal the origin of funds has drawn hackers to cryptocurrencies.
According to Stangarone, DeFi has particularly aided North Korea to launder and hack funds. He stated that DeFi platforms allow easier conversion of funds to cash without the necessity of any know-your-customer protocols.
As per the details from Stangarone, to finance its illegal activities, North Korea uses money that has been stolen and laundered. Money obtained from cryptocurrency that has been stolen “remains an important revenue source” for North Korea, according to the U.N. Panel of Experts.
The fall of FTX, on the other hand, has triggered and alerted global regulators. With more stringent measures to be put in place, it will prove difficult for North Korea to carry out the hacks.
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