1. U.S.-ROK Strategy for Enhancing Cooperation on Combating and Deterring Cyber-Enabled Financial Crime
- Author:
- Jason Bartlett
- Publication Date:
- 11-2022
- Content Type:
- Special Report
- Institution:
- Center for a New American Security (CNAS)
- Abstract:
- The May 2022 U.S.-ROK Summit between President Joe Biden and President Yoon Suk-yeol revitalized previous bilateral commitments to establish a joint cyber working group to address the growing issue of cyber-enabled financial crime with specific emphasis on cryptocurrency, blockchain technology, and illicit North Korean cyber activity.1 This report provides specific policy recommendations for Washington and Seoul to incorporate within the cyber working group to enhance cooperation on combating and deterring cyber-enabled financial crime, especially from state-sponsored actors. North Korea has become the greatest state-sponsored threat to the global financial services sector. From 2021 to June 2022 alone, North Korean cyber operatives and their facilitators stole more than $1 billion (in U.S. currency, as throughout this report unless otherwise indicated) in digital assets through hacking cryptocurrency exchanges and laundering the stolen funds using various financial technologies and obfuscation techniques, including cryptocurrency mixers and foreign over-the-counter brokers. Pyongyang will likely maintain this position as long as the potential gains of cyber operations against financial services are greater than the potential risks and resources needed to conduct these operations. Washington and Seoul must work together to change this reality. This report compiles the findings of a year-long research project to generate actionable policy recommendations for Washington and Seoul to incorporate within their joint cyber working group to strengthen joint deterrence against state-sponsored cyber-enabled financial crime that continues to target both U.S. and South Korean social, financial, and cyber infrastructure. Based on intensive field research and interviews with U.S. and ROK stakeholders, this report outlines current challenges to enhancing U.S.-ROK cyber coordination, details the evolution of North Korea’s cyber program and modern-day threats, provides policy recommendations for the joint cyber working group, and includes an appendix with all relevant U.S. and ROK agencies that can contribute valuable expertise to the group.
- Topic:
- International Cooperation, Bilateral Relations, Cybersecurity, and Financial Crimes
- Political Geography:
- Asia, South Korea, North Korea, North America, and United States of America