DIGGING DEEP

North Korea may be mining bitcoin in addition to hacking it

Obsession
Future of Finance
Obsession
Future of Finance

Last month, North Korea was banned from exporting coal to China, its biggest buyer. The rogue regime may have found a new use for these idle coal supplies: powering bitcoin mines.

That’s according to research by Recorded Future, an information security firm that counts the Central Intelligence Agency’s venture capital arm among its investors, and security non-profit Team Cymru. The research identified activity that the firms believe is bitcoin mining in North Korea starting on May 17. The analysts don’t know if the mining is ongoing, but the activity was present in the last data point Recorded Future collected, from July 6, the firm told Quartz.

Bitcoin mining consumes large amounts of electricity to feed the vast computational power necessary for miners to release new supplies of bitcoin. The bitcoin network releases 12.5 bitcoins (about $50,000 worth, at the current bitcoin price) every 10 minutes to a miner as an incentive for checking bitcoin transactions and adding them to the cryptocurrency’s immutable, distributed ledger, known as the blockchain.

Bitcoin mines are generally large server farms containing thousands of machines specifically designed to mine the cryptocurrency. One of the world’s largest bitcoin mines, in Inner Mongolia, runs an electricity bill of $39,000 a day. North Korea is among the top 10 net exporters of coal globally, according to the International Energy Agency (pdf, p.17). Since the country can no longer earn revenue from coal exports, it makes sense that it might put some coal to use generating electricity for a bitcoin mine.

Recorded Future also found that North Korean elites, who have unrestricted access to the internet, were using virtual private networks (VPNs) to make online purchases with bitcoin. These North Korean VPN users were also checking their Gmail accounts, logging into Twitter, buying expensive sneakers, and watching porn. The firm was able to track the activity because the VPNs and other traffic-masking techniques were used incorrectly, it said.

The researchers couldn’t tell how much processing power North Korea’s suspected bitcoin mines possess. But they believe it’s just one part of a larger strategy to generate revenue for the increasingly isolated regime. Previously FireEye, another security firm, found evidence that North Korean hackers were targeting South Korean bitcoin exchanges to steal their crypto funds. North Korea is also believed to be behind the global ransomware attack WannaCry, which froze computer systems and demanded a bitcoin payment to unlock them.

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