North Korea is a pretty remarkable country: the “family business” run by its three generations of leaders just keeps getting bigger.
Under Kim Il-sung, they followed the classic “borrow it and never pay it back” approach. In the 1970s, they borrowed large sums from Western banks and countries such as Japan and Sweden to buy machinery and equipment, then simply defaulted. The most famous example is the 1,000 Volvos from Sweden. Delivered in 1974, they were barely paid for, and the debt has since ballooned to hundreds of millions of euros, including interest. Sweden still sends bills every year. North Korea occasionally acknowledges the debt in a token way, but never pays up. You can still sometimes see those old Volvos driving around the streets of Pyongyang.
Under Kim Jong-il, they turned “counterfeiting” into a state-level industry. Bureau 39, or Office 39, managed the leadership’s secret stash of foreign currency. It also produced supernotes—so convincing that even the United States was troubled by their quality. Some details were reportedly more precise than those on genuine bills. They also produced large quantities of counterfeit cigarettes and medicines, dabbled in drugs such as opium and methamphetamine, and committed insurance fraud. Diplomats, shipping companies, and criminal networks helped move the proceeds. This generation took traditional counterfeiting to an industrial scale.
Under Kim Jong-un, they upgraded straight to the digital age. The Lazarus Group—and later offshoots such as TraderTraitor—evolved from the early Sony hacking incident and now focus mainly on cryptocurrency exchanges, sometimes making off with billions of dollars in a single operation. Most recently, the FBI has accused them of carrying out a major heist on the scale of the Binance incident. They also send large numbers of IT workers to remote jobs at Western companies under false identities, with most of their wages sent back home. The smaller-scale operation is impersonating remote workers; the bigger one is raiding other people’s crypto vaults. The money is largely used to fund nuclear and missile programs.
The logic has remained consistent across all three generations: when normal trade and loans can’t bring in hard currency, use the machinery of the state to pursue “high-profit gray- and black-market businesses.” The methods have moved with the times—from defaulting on debts, printing counterfeit money, and making fake cigarettes in the physical world to hacking and remote outsourcing in the virtual one—and the scale keeps growing. Outsiders may find it “remarkable”; those on the inside probably just see it as a routine way to earn foreign currency.
Under Kim Il-sung, they followed the classic “borrow it and never pay it back” approach. In the 1970s, they borrowed large sums from Western banks and countries such as Japan and Sweden to buy machinery and equipment, then simply defaulted. The most famous example is the 1,000 Volvos from Sweden. Delivered in 1974, they were barely paid for, and the debt has since ballooned to hundreds of millions of euros, including interest. Sweden still sends bills every year. North Korea occasionally acknowledges the debt in a token way, but never pays up. You can still sometimes see those old Volvos driving around the streets of Pyongyang.
Under Kim Jong-il, they turned “counterfeiting” into a state-level industry. Bureau 39, or Office 39, managed the leadership’s secret stash of foreign currency. It also produced supernotes—so convincing that even the United States was troubled by their quality. Some details were reportedly more precise than those on genuine bills. They also produced large quantities of counterfeit cigarettes and medicines, dabbled in drugs such as opium and methamphetamine, and committed insurance fraud. Diplomats, shipping companies, and criminal networks helped move the proceeds. This generation took traditional counterfeiting to an industrial scale.
Under Kim Jong-un, they upgraded straight to the digital age. The Lazarus Group—and later offshoots such as TraderTraitor—evolved from the early Sony hacking incident and now focus mainly on cryptocurrency exchanges, sometimes making off with billions of dollars in a single operation. Most recently, the FBI has accused them of carrying out a major heist on the scale of the Binance incident. They also send large numbers of IT workers to remote jobs at Western companies under false identities, with most of their wages sent back home. The smaller-scale operation is impersonating remote workers; the bigger one is raiding other people’s crypto vaults. The money is largely used to fund nuclear and missile programs.
The logic has remained consistent across all three generations: when normal trade and loans can’t bring in hard currency, use the machinery of the state to pursue “high-profit gray- and black-market businesses.” The methods have moved with the times—from defaulting on debts, printing counterfeit money, and making fake cigarettes in the physical world to hacking and remote outsourcing in the virtual one—and the scale keeps growing. Outsiders may find it “remarkable”; those on the inside probably just see it as a routine way to earn foreign currency.