South Korea Plans Bill to Monitor and Seize North’s Cryptocurrency Assets

The South Korean government is gearing up to introduce legislation aimed at monitoring and freezing North Korean cryptocurrencies and virtual assets, which are believed to fund the North’s illegal arms programs. The news emerged on Sunday, according to multiple governmental sources.

Initially unveiled by the National Intelligence Service (NIS) in November, the first draft of the bill was returned for further enhancements by President Yoon Suk Yeol. The President wanted the legislation to incorporate “concrete steps to reinforce national security,” stated administration officials who wished to remain anonymous.

The modified bill is the culmination of almost a year of inter-ministerial consultations in South Korea, designed to strengthen existing sanctions against North Korea.

One high-ranking government official, who chose not to disclose their identity, told the JoongAng Ilbo that the revamped bill is in line with the President’s view that “the nation’s cybersecurity infrastructure needs urgent overhaul,” especially after its degradation under the previous administration to avoid upsetting North Korea.

A well-informed administration source revealed that the latest iteration of the bill includes provisions to “identify and neutralize digital currencies and other virtual assets that North Korea has acquired through hacking,” — a feature missing in the original NIS proposal.

South Korean intelligence agencies reported that North Korea pilfered approximately 1.7 trillion won ($1.28 billion) in Bitcoin and Ethereum via diverse hacking methods in 2022 alone.

Last year, Rep. Yoon Han-hong of the conservative People Power Party (PPP), a member of the National Policy Committee, disclosed during a government audit that about $52.46 million in digital assets from North Korean hackers had likely been laundered through South Korean crypto exchanges over the last four years.

According to a recent study by Chainalysis, North Korean cyber criminals have amassed over $3 billion in the past five years. This uptick in cyber theft has coincided with a significant increase in North’s missile tests.

Anne Neuberger, the U.S. Deputy National Security Adviser for Cyber and Emerging Technology, stated in May that nearly half of North Korea’s missile funding comes from cybercrime and crypto theft.

United Nations Security Council experts have also accused North Korea of using cyber-attacks to finance its nuclear and missile ventures.

Apart from the new cybersecurity bill, President Yoon’s administration also plans to establish a presidentially-controlled national cybersecurity committee to bolster the country’s online defenses against international hacking attempts.

The committee, to be led by the head of the National Security Office and include the NIS director, will possess the authority to “prohibit the production, importation, and sale of products that compromise cybersecurity,” according to a PPP official in the know.

In April, the NIS conducted an investigation to ensure that domestic governmental bodies and public institutions were not inadvertently using IT products subject to international sanctions, with particular focus on Chinese and Russian companies like Huawei.

Sentiment: Neutral