BY PATRICK TUCKER
Thieves and sanctioned countries are targeting the digital currency’s exchanges, setting up a fight between governments and cryptocurrency powerhouses. Bitcoin’s rising value got a further boost last week with the debut of the first futures trading. But the digital currency has also attracted the attention the interest of U.S. adversaries. A report out this week says that Russia is eying the currency as a means to bypass harsh sanctions levied by the United States and European governments, while North Koreans are suspected of trying to steal Bitcoins from South Korean cryptocurrency exchanges. All this puts pressure on the U.S. government – and may ultimately hurt the cryptocurrency’s value.
In September, cyber security company FireEye reported that a state-sponsored hacker team — they suspect North Korea — had sent phishing emails to employees at South Korean exchanges, with at least one success. Researcher Luke McNamara noted that hackers target exchanges more than individual cryptocurrency accounts for the same reasons banks attracted interstate bank robbers during the 1930s: regulations varied from state to state, security varied from bank to bank, and, as gangster Willie Sutton observed, banks are where the money is.
Writes McNamara: “If actors compromise an exchange itself (as opposed to an individual account or wallet) they potentially can move cryptocurrencies out of online wallets, swapping them for other, more anonymous cryptocurrencies or send them directly to other wallets on different exchanges to withdraw them in fiat currencies such as South Korean won, US dollars, or Chinese renminbi. As the regulatory environment around cryptocurrencies is still emerging, some exchanges in different jurisdictions may have lax anti-money laundering controls easing this process and make the exchanges an attractive tactic for anyone seeking hard currency.”
But North Korea is not alone. On Tuesday, a Russian news sitequoted Putin advisor Sergey Gazye as saying that the Russian government had an “objective need” for cryptocurrencies to circumvent sanctions. Wikileaks creator Julian Assange is also knee-deep in BitCoin, as are some prominent white nationalists and neo-Nazi groups.
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