Amid ongoing concerns about North Korean attempts to evade international sanctions, security experts are warning that the growing cryptocurrency industry in Southeast Asia could be particularly vulnerable to the regime’s cybercrime activities.
The Royal United Services Institute security and defense think tank highlighted the region’s vulnerability to such attacks in a report released on Monday. According to CNBC, the RUSI report suggests that the North’s regime has been increasingly focused on digital currencies as a way to obtain hard currency to mitigate the impact of tighter economic sanctions:
“As a determined and sophisticated cyber actor in need of financial resources, North Korea is likely to continue to find ways of obtaining and exploiting cryptocurrencies.”
The report’s authors noted that the North Korean government has been exploiting vulnerabilities in the Southeast Asian region for some time, taking advantage of the area’s regulatory environment to avoid financial restrictions. With limited regulatory coordination and an expanding cryptocurrency industry, experts now believe that the area may be an inviting target for the North’s crypto cybercrime activities.
“North Korean networks have engaged in fundraising and have evaded trade and financial restrictions through the use of front companies, agents and deceptive financial techniques at banks across the region.
“Because Southeast Asia is also host to a growing number of cryptocurrency businesses and users, countries in the region could prove vulnerable to North Korea’s cryptocurrency-related activity as well.”
The report’s authors noted that officials in the region are now working to shore up their defenses with efforts to mitigate money laundering and terror financing risks. However, they urged those governments to be even more aggressive in their efforts to reduce their vulnerabilities by focusing on new risk assessments, law enforcement training, and a more coordinated regulatory response.