North Korea, risk and bitcoin

North Korea, risk and bitcoin

North Korea’s constant confrontation with the United States can be traced back to decades. Then the financial sanctions were the financial sanctions imposed by the United States on North Korea in September 2005. It is the world’s first sanctions against sovereign states. The impact is far-reaching.

At that time, the background was that North Korea was economically sanctioned for so many years. Although the industrial level declined, the entire country’s system did not change dramatically. Later, the United States discovered that many of North Korea’s trade activities and financial activities were through Chinese financial institutions. However, how do Americans Know the financial activities between China and North Korea? Because the international settlement is through the US dollar as the medium, the international big banks as the clearing bank, such as Citibank, etc., the two sides of the trade, each open an account in the clearing bank, such as our domestic remittance, add and subtract on the same ledger law. 95% of the world's dollar clearing business is done in New York.

There will be a problem during the period. How do you exchange information about remittances between banks? Exchange remittance information via swift code.

What is swift code?

The SWIFT Code (referred to as the Bank International Code) is generally used for power generation, letter of credit telegraph, and every bank has it, which is used to quickly process inter-bank telegrams. Large banks like ICBC and China Construction Bank will also assign different Swift codes to their internal branches.

SWIFT is the English abbreviation of “Society for Worldwide Interbank Financial Telecommunication”. All member banks of the association have their own specific SWIFT code, SWIFT CODE. At the time of wire transfer, the remittance bank sends the payment message according to the SWIFT CODE of the receiving bank, and the money can be remitted to the receiving bank. This number is equivalent to the ID number of each bank. In the case of SWIFT, if your bank is a well-known bank, such as the Bank of China, then the other bank can find the corresponding code by consulting the Swift code table. Of course, your receiving bank will provide this code to reduce the chance of errors.

In a relatively closed environment, the Interbank Financial Telecommunication Association, the equivalent of a miner, acts as an intelligence center and is responsible for interpreting messages. The content of the message includes time, finance, expiration date, bank code and account name. The necessary information, after decoding, sends the message to the clearing bank, so the banks of both parties can add and subtract on the ledger. In fact, it is essentially a centralized organization with extremely low efficiency. The most important thing is to be monitored, just as the United States is staring at North Korean financial activities.

North Korea coveted bitcoin

Perhaps this would explain the sudden rise in North Korean authorities’ interest in Bitcoin in recent years.

A monitoring website in 2017 noticed that the Bitcoin node activity in North Korea suddenly increased exponentially, from zero to hundreds of times a day. What is certain is that North Korea launched a large-scale mining operation against Bitcoin, which until then was zero in North Korea.

North Korea used the state machine to start digging bitcoin. What is it intended?

On September 27, 2017, the US government announced a new round of sanctions against North Korea, which will impose sanctions on eight North Korean banks. At the same time, more than 20 financial practitioners are being sanctioned. Most of these people are North Korean banks around the world. representative.

The US sanctions against the DPRK pointed out that the international community will reduce oil supply to North Korea, ban North Korean textile exports, and ban North Korean migrant workers from sending money to the country to minimize their nuclear weapons and missile programs. In response to the sixth nuclear test conducted by North Korea on September 3, 2017, the United States distributed a draft resolution sanctioned to North Korea to members of the Security Council for discussion by 15 members of the Security Council the following day.

This is the ninth UN Security Council resolution on sanctions against the North Korean nuclear program since 2006.

Internal and external troubles have caused the North Korean authorities to continue to rely on Bitcoin.

North Korea’s Bitcoin business network is not only mining, but also transfer payments to evade US surveillance and serve as a tool for money laundering. The media even believes that North Korea has spread a large number of hackers around the world, attacking the network, and of course organizing speculation.

Why did North Korea embark on the road of speculation?

At the same time as the market economy gradually developed in North Korea in the early 21st century, there were also some serious financial problems, such as the expansion of private underground finance, the emergence of hyperinflation, the phenomenon of foreign currency expelling local currency, and the large number of overseas illegal branches. Establishment and so on. In order to cope with the changes in the financial situation and solve emerging problems, the North Korean government has adopted a series of reform measures that combine encouragement and suppression.

Coincidence is still inevitable?

How scared a person is, how high a slogan is; how scared a country is, it is desperate to send missiles.

Since Kim Jong-un took office, North Korea’s declaration of the will of the "nuclear state" has become more and more high-profile and its attitude has become more and more tough. Recently, Kim Jong-un has started to act again.

According to a report by the Korean Central News Agency on May 10, North Korean leader Kim Jong-un directed the fire brigades training of the frontiers of the Korean People's Army and the frontline defense forces of the western region on the 9th. After the command post learned about the firepower training programs of various long-range strikes, Zheng En issued a training start command. This training, combined with maneuvering and firepower raids, is intended to test the rapid response capability of the frontier and western frontline defense forces, "training success." The report did not specifically mention which firepower measures were used in the training.

Kim Jong-un expressed satisfaction with this training. He stressed that according to the current situation requirements and the party's strategic intentions, it is necessary to further improve the combat mission execution capability of the frontier and western frontline defense forces, and maintain a versatile combat mobilization situation that can respond to any unexpected situation.

Every time North Korea launches missiles and the time points of bitcoin skyrocketing coincide.

It shows that Bitcoin not only finds a financial channel for the countries being sanctioned, but also is a safe-haven asset. Especially in the face of the turbulent world financial situation, Bitcoin will become a safe haven for financial risks.

Source: Bitcoin Caesar

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