North Korea is now the fifth-largest holder of Bitcoin worldwide, according to the latest available data from Bitcoin Treasuries. The United States holds the largest share, with nearly 200,000 BTC, followed by China with 190,000 BTC, both of which were seized during judicial cases. The United Kingdom is in third place with over 61,000 BTC, also the result of judicial confiscations. Ukraine ranks fourth, with more than 46,000 BTC, mostly received as donations.

The Illicit Bitcoin of North Korea

North Korea has emerged as the fifth-largest holder of Bitcoin globally, with more than 13,500 BTC, valued at over $1.1 billion. To put this into perspective, North Korea's GDP is approximately $16 billion, meaning the Bitcoin they hold represents around 6.3% of the country's total economic output.

However, these Bitcoin holdings were not acquired through confiscations, donations, or purchases. Instead, they were the result of cybercrime, primarily carried out by the infamous Lazarus Group. This hacker collective, known for its global criminal activities, is not only tolerated by the North Korean government but likely receives support from the regime of Kim Jong-un. As a result of these state-backed thefts, North Korea ranks fifth in the world for Bitcoin holdings, despite its relatively low GDP, which ranks 140th globally, alongside countries like Laos and Afghanistan.

Global Bitcoin Holders

Aside from North Korea, only two other countries hold more than 1,000 Bitcoin: Bhutan, with over 10,000 BTC, and El Salvador, with more than 6,000 BTC.

Bhutan stands out as the only major country to have mined its Bitcoin, while El Salvador is the only nation in this group to have bought its Bitcoin on the market.

The top three countries with the largest Bitcoin reserves obtained them primarily through judicial confiscations, while the fourth country, Ukraine, received most of its Bitcoin as donations. North Korea’s holdings, ranking fifth, were largely acquired through state-sponsored thefts, while Bhutan (seventh) mined its Bitcoin and El Salvador (eighth) made market purchases.

Germany, which was previously in the top three, sold off all of its Bitcoin holdings last year, which it had obtained through judicial confiscations.

The Record-Breaking Heist by Lazarus Group

One of the most sensational thefts carried out by the Lazarus Group occurred recently against the crypto exchange Bybit, marking the largest cryptocurrency theft ever in terms of dollar value. This heist is likely the most valuable theft in history when considering nominal value.

The group successfully withdrew more than 400,000 ETH from the exchange, worth approximately $1.5 billion at the time. By February 22, the Lazarus Group had amassed over 490,000 ETH and 778 BTC in their wallets. They later converted much of their Ethereum into Bitcoin, reducing their ETH holdings to around 13,700 (valued at $26 million) while increasing their BTC holdings to over 13,500 (worth $1.1 billion).

The swift sale of Ethereum likely had a negative impact on its price. Before the Bybit theft, the Lazarus Group held only around 1,300 BTC, meaning this major heist significantly boosted their Bitcoin holdings, placing them among the largest Bitcoin holders worldwide.

Lazarus Group: North Korea's Cyber Attack Force

The Lazarus Group is a well-funded and highly skilled group of cybercriminals operating under the direct support of North Korea.

The group first made headlines in 2014 with a devastating attack on Sony Pictures, stealing sensitive information and damaging company files. In 2016, the Lazarus Group targeted the Bangladesh Bank, successfully siphoning $81 million from its account at the Federal Reserve Bank of New York. The following year, the group unleashed the WannaCry ransomware, infecting thousands of computers globally and disrupting critical services while inflicting substantial financial losses.

The Lazarus Group is known for executing large-scale and highly sophisticated cyberattacks, often aimed at political or financial institutions. The recent attack on Bybit showcased the group's advanced capabilities. Additionally, their ability to swiftly adapt and evolve their tactics makes them a formidable and persistent threat to cybersecurity efforts worldwide.

What Lies Ahead for North Korea's Bitcoin

The key question now is what North Korea intends to do with its vast Bitcoin holdings.

The most plausible scenario is that the North Korean government will sell some of the cryptocurrency to fund its operations, including military activities. However, such a sale could put downward pressure on Bitcoin’s price. Last year, when Germany sold approximately 50,000 BTC, the price dipped temporarily from $60,000 to $55,000 but quickly rebounded within two weeks, showing that large-scale sales can have short-term effects but are usually absorbed by the market.

Due to the scrutiny surrounding North Korea’s assets, it’s unlikely the country will be able to sell its Bitcoin through major centralized exchanges. Any attempt to deposit the funds into regulated platforms would likely result in the assets being frozen. Therefore, any potential sale would likely be smaller, more clandestine, and conducted through alternative methods rather than mainstream exchanges.