North Korea is likely to increase the number of fraudulent cyber operations to fund its weapons of mass destruction program, after failing to secure sanctions relief from the U.S., a U.S. State Department official said.
“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,” a Department of State spokesperson told Voice of America‘s Korea Service on Tuesday.
North Korea was hoping to see sanctions ease at the Hanoi summit in February in return for dismantling its Yongbyon nuclear facility. However, Washington told Pyongyang to carry out a comprehensive denuclearization if it wanted to end sanctions, VOA adds.
Sanctions placed on North Korea, especially those imposed since 2016 in response to its increased nuclear and missile tests, have apparently hurt Pyongyang’s economy.
“There is no question that sanctions are squeezing North Korea’s economy, and the impact [means it will] increase efforts to find ways to circumvent sanctions or alternative sources of funding,” said Robert Manning, a senior fellow at the Atlantic Council.
“That is behind [North Korean leader] Kim [Jong Un]’s effort to boost his ties with China and Russia and also using cyber currencies to work around the bans on financial transactions,” he added.
Ken Gause, director of the Adversary Analytics Program at the Center for Naval Analyses, said North Korea is resorting to “thievery including cyberattacks to bring in funds” as it feels “the pinch from the sanctions regime.”
The State Department spokesperson warned that the U.S. national security and global economy are under threat by North Korea’s illicit cyber operations.
“North Korean cyberattacks and other malicious cyber activities pose a risk to critical infrastructure in countries around the world and to the global economy,” said the spokesperson.
According to the report by the United Nations Panel of Experts on North Korean Sanctions Committee issued in early March, North Korea “carried out at least five successful [cyber] attacks against cryptocurrency exchanges in Asia between January 2017 and September 2018, resulting in a total loss of $571 million.”
The report further stated that “Cyberattacks by [North Korea] to illegally force the transfer of funds have become an important tool in the evasion of sanctions and have grown in sophistication and scale since 2016.”
Secretary of Homeland Security Kirstjen Nielsen highlighted the global impacts of North Korea’s cyberattacks last month at George Washington University.
“In the past two years we witnessed North Korea’s WannaCry ransomware spread to more than 150 countries, holding health care systems hostage and bringing factories to a halt,” Nielsen said in her speech.
North Korea’s WannaCry attacks hit 300,000 computers around the world in 2017 with the hackers demanding ransom payments in cryptocurrencies and crippling more than 20 percent of hospitals in the U.K., costing billions of dollars.
Last September, the U.S. Justice Department charged a North Korean man suspected of launching cyberattacks using the WannaCry ransomware to hack Sony Pictures Entertainment in 2014. Park Jin Hyok is thought to be a member of the Lazarus Group, an infamous hacking team sponsored by the North Korean government.
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