What's up guys and welcome back to wall street millennial on this channel, we cover everything related to stocks and investing north korea is a country known as the hermit kingdom, and most people don't take them too seriously. The vast majority of their people live in abject poverty and rely on primitive farming techniques to get by, despite their occasional attempts on international diplomacy, pretty much the entire world has levied crippling economic sanctions against them. The secretive regime has invested billions of dollars into a highly sophisticated nuclear weapons program and they are in fact one of only nine countries to have nuclear weapons supreme leader kim jong-un has also been able to amass a fleet of ultra-luxury armored, mercedes and other imported goods. Importing materials for their nuclear as well as kim's personal luxuries, requires foreign currencies and a lot of it, given how strict international sanctions are.

The hermit kingdom has no legal methods of obtaining this, but they're, obviously getting their hands on hard currency. Somehow most people have a perception of north korea as a primitive country unable to provide even the most basic amenities to its people in most aspects of the economy. This is true, but the upper ranks of kim's government are highly sophisticated and western countries would underestimate him at their own peril. Over the past few years they have set up, perhaps the most capable and dangerous criminal syndicate in history, which generates an estimated 1 billion dollars.

In hard currencies per year, they engage in activities as diverse as drug smuggling, ransomware attacks and recently they've even expanded into making cryptocurrency scams in this video we'll go through the shocking links that kim jong-un goes to to fund his nuclear ambitions, as well as his lavish Lifestyle to understand, what's going on with north korea today it's important to look at how we got to the current situation. In the first place for the first 40 years of north korea's existence, they received significant financial aid from the soviet union. They became dependent on these handouts which abruptly disappeared when the soviet union collapsed in 1991.. This resulted in a large-scale famine, with an estimated 1 million deaths supreme leader kim jong-il saw that things were getting rough.

If he couldn't engineer an economic turnaround, the country would collapse. So in 2000 he swallowed his pride and signed a peace and trade treaty with south korea. He took advantage of south korean president kim dae-jong's so-called sunshine policy, which aimed to normalize relations between the two countries for their mutual benefit in a joint venture with south korean industrial conglomerate. Hyundai north korea created the mount kung gang tourist region, which welcomed hundreds of thousands of paying tourists.

Even more important was the kaesong industrial region which was located inside north korea. South korean companies would send skilled workers to oversee the building of industrial factories. They would then employ cheap north korean labor and export the goods back to south korea or other countries at its peak, the industrial zone employed 53 000 north korean workers and paid an aggregate 90 million dollars of annual wages. Unfortunately, for the workers, the government expropriated, the vast majority of this money and the workers were only given opinions.

North korea has long followed an ideology of self-reliance and viewed its interactions with the outside world, as a temporary measure to help the economy recover from its famines. Kim jong-il started using the foreign currency, they earned from trade with south korea to buy imported parts and materials for their nuclear weapons program. In 2006, they conducted their first successful underground nuclear test. The tests created small earthquakes, which international officials could detect from their seismic waves, while their first test was small.

They gradually refined their technology by 2013. The blasts were big enough that they could threaten entire cities. In 2010, a south korean warship was sunk after being hit by a north korean torpedo. Later that same year, north korean artillery fired out the south korean island of yong pyong, killing four and wounding dozens.

These attacks caused south korea to cease all trade and economic cooperation with the north and just about every other major country imposed strict economic sanctions. Without access to foreign trade, it became impossible for north korea to generate foreign currencies or modernize its pathetically weak economy. They literally don't have the capability to keep the lights on at night, the kim family had a perfect situation going on beforehand. They could make money from the joint industrial zone with south korea and use this money to fund their lavish lifestyle.

So why would they throw it all away? The biggest concern of kim jong-il and his successor, kim jong-un, was holding on to political power. The more contact north korean workers have, with south korean companies and visitors, the more likely they'd find out how much worse their living conditions are compared to the rest of the world. To maintain the facade of north korea. Being a socialist paradise kim needs to keep the people isolated from the rest of the world.

Cutting off foreign trade was a small price to pay to achieve this goal, but now that they couldn't obtain foreign currencies through legitimate means they had to get creative. To this end, the kim family created bureau 39, which is given one mandate, use any means necessary to get your hands on foreign currency, so how they do this. The greatest asset they have is a massive supply of cheap labor. Their domestic manufacturing capabilities are too primitive to make advanced parts for their nuclear weapons programs or mercedes limousines for their supreme leader, so bureau 39 came up with a solution.

While russia and china have technically signed on to the united nations sanctions, they don't take them too seriously. Bureau 39 created various companies to conscript north korean workers and send them to russia and china to work in manufacturing and construction. An estimated 150 000 north koreans work abroad, mainly in low-skilled jobs, earning minuscule wages. What little money they do make is expropriated by the regime.

Importantly, these wages are in chinese yuan or russian rubles, which is extremely valuable to the regime. You might think that the workers would use this as an opportunity to escape, but this is easier said than done: they're forced to live in heavily guarded compounds attempted escapees are routinely apprehended by local authorities and headed back over to north korea. If you get caught trying to escape, it will be the last mistake you ever make, but when exporting construction workers wasn't enough kim told bureau 39 to get even more creative as early as the 1970s north korea started growing poppy plants for heroin production and eventually transitioned To creating methamphetamines in state-run labs, they covertly export these products all around the world. In 2003, the australian coast guard intercepted a north korean cargo vessel and found 125 kilograms of heroin worth an estimated 160 million dollars.

Given the large scale of this capture, it's likely the kim regime makes billions per year exporting illegal drugs. In recent years, north korea's criminal activities have become more sophisticated, as the global economy has digitized. So too has bureau 39. bureau 39 employs hundreds or possibly even thousands of hackers.

The vast majority of north koreans do not have access to computers, let alone the internet, but they train a select core of computer experts with one purpose using the internet to extract money from abroad. In may of 2017 people all over the world started opening up their computers to find that all their files were inaccessible. They would then get a message saying their files have been encrypted. The only way to get them back was to send 300 to 600 worth of bitcoin to a specific address.

The hack exploited, a vulnerability in windows, 7 computers that had not been updated recently and thus lacked the most recent cyber security features. Almost every single country in the world was impacted with the hardest hit countries being russia, ukraine, india and taiwan. That's because many users in these countries used old pcs which no longer received updates. It is estimated that the hackers made hundreds of millions of dollars worth of bitcoin ransom payments, but the economic disruption to the victims was far greater.

The national health services, which is the public health care operator in the uk, had more than 70 000 of their devices. Compromised, including mri scanners and blood storage refrigerators, it completely disrupted their operations and they were forced to temporarily pause non-emergency procedures. The semiconductor giant taiwan semiconductor was forced to shut down multiple of its factories, as their computers were temporarily rendered, unusable. Linguistics experts analyzed the text displayed in the ransom message based on the wording they used.

The authors were probably fluent in chinese and english was not their first language. The computers responsible for the hack were located in the utc plus 9 time zone, which is the same time zone as north korea. Further analysis by the fbi found that the hacker's computers had korean alphabet fonts installed, but the most damning piece of evidence was the striking similarities in the code to previous cyber attacks, which were linked to north korea within a few months. Intelligence agencies in the us, uk, canada, japan and new zealand all concluded that the attack was perpetrated by north korea.

It looks like bureau 39 masterminded the attack with the help of chinese computer scientists. This doesn't necessarily mean that the chinese government had any involvement. North korea could easily have paid private individuals from inside of china to come over and help them seeing as chinese computers also fell victim to the attack. It seems unlikely that the chinese government had any involvement after the 2017 hack.

Cyber security companies beefed up their defenses, making it much more difficult for kim to perform a similar attack, so bureau 39 again had to get creative. They created numerous fake crypto trading applications and spammed emails to employees of crypto exchanges around the world. If any of these employees downloaded the app it would install a trojan horse onto their computer, infiltrate their company's servers and steal cryptocurrencies from them. It's unclear how much money they made from these, but the u.s department of justice has traced at least nine scam, crypto trading apps in north korea.

The links that kim jong-un is willing to go to to evade sanctions and obtain hard currencies shows how vulnerable his position is. He knows that if people see how much better life is in the outside world, they will surely revolt against his repressive regime. He has to keep his people isolated and demonize the outside world to justify his nuclear program. Despite the limited resources, north korea has still been able to build an army of talented hackers who can make a few hundred million dollars from ransomware and crypto scams.

If the country liberalized, these programmers could use their talents to make the next samsung, which is worth 400 billion dollars, but for kim the economic inefficiency is a small price to pay. Even with the country's constrained resources, he still has access to all the mercedes, yachts and private jets. He could ever dream of alright guys that wraps it up for this video. What do you think about north korea? How much money do you think kim makes with bureau 39? Let us know in the comments section below as always.

Thank you so much for watching and we'll see you in the next one wall, street millennial, signing out.