North Korea is reported to be stepping up mining of the privacy coin Monero as the regime continues its efforts to circumvent sanctions.
And it has begun to produce, mine its own Monero, a lesser-known alternative cryptocurrency to Bitcoin.
Monero (XMR) is an open-source cryptocurrency that focuses on fungibility, privacy and decentralisation. Monero uses an obfuscated public ledger, meaning anybody can broadcast or send transactions, but no outside observer can tell the source, amount or destination. Monero uses a Proof of Work mechanism to issue new coins and incentivise miners to secure the network and validate transactions.
According to reports, network traffic for XMR mining that had originated from North Korean IP ranges had increased by at least ten-fold since May 2019, making it the most popular digital asset to mine and surpassing the regime’s mining activity for bitcoin (BTC).
The report attributes the regime’s changing preference for Monero to the fact XMR mining can take place on conventional computers, which lowers operating costs and negates the need to import mining rigs from abroad.
Monero transactions are also anonymous, making it easier for North Korea to possibly “evade attempts to track funds” as well as circumvent sanctions imposed on the regime by the U.S. and the U.N. Security Council, according to Recorded Future.
A report suggested that cryptocurrencies are a convenient and valuable tool for North Korea as an independent, loosely regulated source of revenue generation, but also as a means they could move and use illicitly obtained funds.
A U.N. study previously suggested a branch of the North Korean military was responsible for the regime’s crypto mining activity, however the report was unable to pinpoint the entity that was responsible.
North Korea’s most famous cyber attack known to the public, was one that used a code called WannaCry. It reportedly disabled the British health care system for days and created havoc elsewhere. American officials have never publicly acknowledged their inadvertent role in fueling the attacks.
Monero is said to be used by North Korea since at least since August 2017 when operatives involved in the WannaCry attack exchanged bitcoins into monero. The regime’s bitcoin mining activity has remained relatively static over the past two years, according to the report.
Monero is the favourite cryptocurrency of cyber criminals. A study found that cybercriminals launder an estimated $80-$200 billion a year and are moving away from Bitcoin as Monero offers greater anonymity.