### Cyber money laundering arena - North Korea and the shadow of VIP casinos 2015-2016

### Cyber money laundering arena - North Korea and the shadow of VIP casinos 2015-2016

In 2016, funds stolen from the Central Bank of Bangladesh were eventually brought to the Solaire Resort and Casino in the Philippines. Six Chinese-speaking men showed up at the same time every morning, as if following a work schedule, and spent several hours immersed in baccarat, betting quietly, unmoved by the wins or losses. Their behavior was more like "work" than entertainment, and the process of converting cash into chips and back into money was itself the second stage of money laundering [7††North Korea Razarusu 2R.pdf†].

Behind this was the harsh international environment that North Korea was facing: in the mid-2010s, the UN Security Council successively tightened sanctions against nuclear tests and ballistic missile launches, key exports such as coal and iron ore were clamped down, and channels for overseas remittances were blocked. For North Korea, obtaining foreign currency was a matter of life and death for the survival of the nation, and conventional means of fundraising through smuggling and diplomatic immunity were no longer sufficient. What emerged was a new source of income using cyberspace. Hacker units, known as Lazarus, were mobilized under the command of the state as a means of directly acquiring foreign currency needed by the government.

For North Korea, the "casino" venue was an excellent mechanism to circumvent the sanctions net. The casino industry was expanding rapidly in the Philippines at the time, and there was inadequate verification of customer identities and tracking of the origin of funds. Stolen funds funneled into the casinos became "legal chips" through play, and were converted back into legitimate funds when cashed out again. North Korea's strategy for obtaining foreign currency was to combine the cutting-edge technology of cyber-attacks with the classic "loophole" of casinos.

This bizarre scene symbolizes how North Korea, cornered by sanctions, institutionalized cybercrime on a state-wide basis to gain foreign currency. Their cold-blooded play was not just a gamble, but a "mission" to support the national economy. The glittering resort casinos on the shores of Manila Bay had become the front line of a nation's sanctions evasion and cyber strategy.