On Wednesday, the U.S. Department of Justice (DOJ) unsealed an indictment against three intelligence operatives from the Democratic People’s Republic of Korea (DPRK). The individuals are accused of conspiring to steal and extort cash and cryptocurrency valued over $1.3 billion from major banks and global corporations for Pyongyang. The charges underscore North Korea’s intensified cyberwarfare efforts to illegally obtain currency to support the regime’s battered cash reserves.

As a leading global state-sponsor of terrorism and ferocious human rights offender, North Korea has been subject to financial regulations and international sanctions, forcing the regime to rely on cybertheft for funds to prop up its weapons program. U.N. reports indicate that the regime used hundreds of millions of dollars stolen through cyberattacks to support its nuclear and ballistic missile programs in 2020.

Along with North Korea, numerous terrorist groups, including ISIS, have sought out cryptocurrencies to help fund their terror activities. Cryptocurrencies are currently subject to minimal oversight, making it an appealing means to bypass government regulators. In April, the Counter Extremism Project (CEP) and Berlin Risk published the joint study, Cryptocurrencies as Threats to Public Security and Counter Terrorism: Risk Analysis and Regulatory Challenges, which highlighted the dangers and risks associated with terrorist groups utilizing cryptocurrency to finance extremist activities.

Funds raised by terrorists and their supporters can be used to purchase material to support terrorist attacks and to provide other financial support for the group. Operational support also includes the use of funds to support terrorist groups on an ongoing basis, including personnel costs as well as funds for general security and communication. Experience has shown that the amounts of money in the area of terrorist financing are typically very small and can easily be disregarded by regulators.

To read CEP’s joint study with Berlin Risk, Cryptocurrencies as Threats to Public Security and Counter Terrorism: Risk Analysis and Regulatory Challenges, please click here.