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North Korea’s notoriety in illegal digital currency usage has been brought to the limelight again after two South Koreans have been arrested for committing espionage against their authoritarian enemy neighboring country.

One of the individuals is a serving army captain, while the other is an executive of a digital assets exchange. The country’s police revealed that the two are the country’s first record of such a civilian and military personnel pairing.

According to an Agence France-Presse (AFP) report, the 38-year-old digital assets exchange executive named simply Lee was recruited by a North Korean agent who paid him around $600,000 in digital currency. Lee, in turn, recruited that 29-year-old army captain by paying him around $38,000.

Lee also allegedly provided the army captain with a “Poison Tap” device—a USB-like device that compromises any computer it is plugged into, as well as a camera-equipped wristwatch.

In his role, the army captain used the device to purloin the login information of South Korea’s military communications system, the Joint Command and Control System. The data was passed to the suspected Pyongyang spy.

“The two men have been arrested on charges of violating the national security law,” a South Korean police official told AFP.

Digital currencies and North Korea

This is not the first time that North Korea has been caught in the middle of illicit digital currency usage. The country has been noted to be using digital currencies to evade international sanctions and fund its highly controversial nuclear program.

The UN reported that the country’s government sponsored the theft of more than $50 million from digital assets exchanges by North Korean hackers in 2021.

This year, the U.S. has also connected the over $600 million Axie Infinity Ronin network exploit to North Korean hackers. And recently, the U.S. Department of Justice brought charges against two Europeans for providing technical information on how to use digital assets to evade the sanctions against North Korea.

Meanwhile, the more prosperous South Korea has been ramping up efforts to provide regulatory clarity for the digital currency industry. The country’s regulators have introduced several strict requirements for both investors and exchanges alike, including comprehensive registration requirements.

These regulations recently aimed at breaking the seeming monopoly of Dunamu, owner of the largest digital assets exchange in South Korea, Upbit. The Korea Fair Trade Commission (KTFC) passed a law that will put the company under strict scrutiny.

Watch: CoinGeek New York presentation, FYI: Better Information Tools for a More Lawful Blockchain Industry

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