South Korea Bill Will Freeze North Korea Crypto Assets Used To Fund Weapons Programme

Updated: 05 September 2023

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South Korea is set to introduce a bill to track and freeze crypto assets used by North Korea to fund its weapons programme.

That’s according to a report in The Korea JoongAng Daily, which said President Yoon Suk Yeol ordered a revision to the bill to contain “practical measures to bolster national security.” The bill, which has undergone revisions over the past 10 months, will also enable the government to implement stronger measures to enforce sanctions against North Korea, the report said, citing unnamed government sources.

The South Korean president believes that “the country’s cyber security framework urgently needs repair,” and that the previous administration had neglected it to avoid offending North Korea, the story said.

The updated bill includes provisions to track and neutralize virtual coins and cryptocurrency assets stolen by North Korea through hacking activities. An earlier version of the bill, which had been initially proposed by the National Intelligence Service in November, was sent back for further refinement by the South Korean president.

Korean intelligence estimates that North Korea stole approximately 1.7 trillion won ($1.28 billion) worth of Bitcoin and Ethereum in 2022 alone, the newspaper reported.

South Korean President Yoon Suk Yeol salutes the national flag during a cabinet meeting at the presidential office in Seoul, South Korea

And approximately $52 million in virtual assets, linked to North Korean hacking groups, may have been cleaned or hidden after being funneled into South Korean cryptocurrency exchanges over the past four years, revealed Yoon Han-hong, a member of the People Power Party, the report said.

North Korean hackers have managed to accumulate over $3 billion through cybercrime in the last five years, as reported by Chainalysis, a company specializing in blockchain analysis.

Cyber Crime Fuels North Korea’s Missile Tests

A surge in North Korea’s cybercrime proceeds has coincided with a significant increase in missile tests, with the regime launching more than 90 cruise and ballistic missiles in the previous year, the story said.

About half of North Korea’s missile program has been funded by cyberattacks and cryptocurrency theft, according to a White House official, Anne Neuberger.

Experts reporting to the United Nations Security Council have also accused North Korea of using cyberattacks to finance its nuclear and missile programs.

South Korea Bolsters Cybersecurity

In addition to the cybersecurity bill, the Yoon administration plans to establish a national cybersecurity committee directly under the president’s authority to strengthen the country’s online defenses against foreign hacking attempts.