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Why North Korea's Cybercrime Affects Its US Relationship

Why North Korea's Cybercrime Affects Its US Relationship

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By William Tucker
Columnist, In Homeland Security

Former U.S. State Department Official David Asher once called North Korea a “Soprano state,” saying “North Korea is the only government in the world today that can be identified as being actively involved in directing crime as a central part of its national economic strategy and foreign policy.” Though it’s possible to include Cuba and Venezuela among nation-states with criminal enterprises, neither of these nations have the capacity in the cyber realm to match North Korea capabilities.

Asher made his remarks in 2003. But the State Department is concerned once again that North Korea will use its criminal capabilities – particularly in the cyber realm – to make money while it is under U.N.-led sanctions.

North Korea Hoping for Economic Sanctions Relief, But US Has Different Goal

According to a report from Voice of America, a State Department spokesman stated, “As North Korea feels the impact of sanctions, it will become more reliant on state-sponsored criminal activities, including through cyber operations, to help fund its weapons of mass destruction programs.” When North Korean leader Kim Jong Un met with U.S. President Donald Trump this past February, the reclusive nation hoped to gain sanctions relief in exchange for dismantling the Yongbyon nuclear facility.

The U.S., however, wanted full de-nuclearization before any lifting of the sanctions could take place. North Korea’s economy has been impacted by sanctions over time, but it was the 2016 sanctions that have caused significant damage. Couple that with yet another drought affecting food production and you get a desperate nation.

North Korea Has Conducted Cyberwarfare and Cybercrime for over 25 Years

North Korea first created a cyberwarfare unit in 1993 that has since evolved into several separate units operating under the command of the Reconnaissance General Bureau. Currently, the major command is known as Unit 121, which oversees Unit 180, Unit 91 and Lab 110. Each unit has a different focus, but their cybercrime targets include those elements one would expect a nation-state to focus on, such as infrastructure and stealing secrets.

Unlike other nation-states, however, North Korea also engages in monetary theft and revenge attacks against those who mock its regime. Since Pyongyang is already under sanctions, the illicit activity is difficult to punish. The inability to firmly link an attack to North Korea is another incentive for the regime to pursue this line of criminal activity.

North Korea Taking Advantage of Anonymous Currency Exchanges to Bypass Sanctions

Making matters worse is the rise of digital currencies like Bitcoin and new technologies such as blockchain that allow for anonymous currency exchanges and bypass sanctions. This has become the primary method that North Korea uses to purchase products internationally — or more specifically, from China and Russia — without running afoul of the sanctions regime.

Pyongyang needs cash for its weapons programs and cybertheft has shaped up as an effective route to acquiring needed materials. In North Korea’s view, it still needs a nuclear deterrent to prevent a U.S.-led invasion, but the U.S. does not seem willing to remove sanctions or normalize relations until North Korea disarms itself.

A Workable Deal Has Yet to Be Struck between North Korea and the US

It makes sense that both the U.S. and North Korea hope to secure a comprehensive deal in the shortest time possible, but this is an unrealistic expectation. Though the summits and improved relations between the two Koreas are laudable, the situation between Washington and Pyongyang is still intractable.

North Korea needs a deal for its livelihood, while the U.S. wants a deal allowing for a political victory in the short term and a long-term ability to change its military footprint in East Asia. Until a deal can be struck that meets the needs of all parties, the situation simply will not change and North Korea’s behavior will remain criminal.

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