In 2022 alone, North Korea, or the Democratic People’s Republic of Korea (DPRK), has reportedly stolen over $1 billion in cryptocurrency from organizations in the cryptocurrency sector via one of its primary hacking outfits—Lazarus Group. This is up from $400 million in 2021, and these heists account for a third of all losses from cyber intrusions in the cryptocurrency sector this year. Further upheaval in the cryptocurrency sector has already caused financial authorities to increase calls for regulation. Bankruptcy and scandals involving multiple companies are tanking the industry and the value of cryptocurrencies. Many of these companies are based in the United States, making U.S. regulation especially consequential. The country’s central role in both the cryptocurrency sector and efforts to regulate it—along with the sector’s current descent into chaos—make this the opportune moment to focus U.S. government policy initiatives on cryptocurrency companies and products. Given the changes in the threat landscape and financial system, the United States should alter its policy focus accordingly. “Lazarus’ cryptocurrency theft dates back to at least 2017, and by the end of 2018, the group was responsible for over half of total losses from thefts of cryptocurrency exchanges.
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