South Korea Looks to Freeze North Korea’s Crypto Assets

South Korea is reportedly planning to submit a bill to track and freeze cryptocurrencies and other virtual assets used by North Korea. The bill has been in the works for ten months and aims to cut off funding for Pyongyang’s weapons programs. The move comes as South Korean President Yoon Suk Yeol instructed to revise the bill to contain “practical measures to bolster national security” before submission.

The South Korean government has consulted various agencies to develop the bill, which is expected to add to the existing sanctions against North Korea. The country’s cybersecurity framework has been a major concern, with President Yoon Suk Yeol acknowledging the urgent need for repairs.

One aspect of the bill focuses on tracking and neutralizing virtual coins and cryptocurrency assets North Korea stole through hacking. Last month, South Korea’s National Intelligence Service revealed that North Korean hackers had illegally accumulated $180 million in cryptocurrency exploits in the first half of this year. The Korea JoongAng Daily also reported that North Korea stole $1.28 billion worth of bitcoin and ether through hacks in 2022, according to South Korean intelligence.

The Lazarus Group, a North Korean hacking organization, is among the prime suspects in various crypto-related hacks. In July, CoinsPaid, a crypto payments processor, disclosed a $37 million exploit and pointed to Lazarus Group as the likely perpetrator.

South Korea’s efforts to track and freeze crypto used by North Korea are part of a broader international push to clamp down on illicit activities facilitated by digital assets. Countries worldwide increasingly recognize the need to regulate and monitor cryptocurrency transactions to prevent money laundering, terrorism financing, and other criminal activities.

The proposed bill reflects South Korea’s commitment to national security and its determination to curb North Korea’s access to funds for its weapons programs. By freezing and tracking crypto used by North Korea, South Korea aims to disrupt the illicit financial networks that support Pyongyang’s nuclear and missile development.

However, implementing such measures may take a lot of work. Cryptocurrencies’ decentralized nature and their anonymity pose significant challenges in tracking and freezing illicit funds. It remains to be seen how South Korea will navigate these complexities and enforce the proposed bill effectively.

Overall, South Korea’s move to track and freeze crypto used by North Korea demonstrates the growing importance of cryptocurrency regulation in the context of national security. As digital assets play a significant role in global finance, governments will continue to develop measures to mitigate the risks associated with their use.