Not Sparta, Pyongyang: The Great Crypto Heist and the Israeli Lesson

Prime Minister Netanyahu hinted at the possibility of using cryptocurrency to bypass sanctions. Days later, approximately $6.3 billion in crypto was stolen from Binance, likely by North Korea. The article analyzes the difficulty of converting stolen assets into usable money, and the lesson for Israel.

Prime Minister Benjamin Netanyahu prepared the public for the possibility of banking sanctions on Israel, stating he had examined using cryptocurrency and blockchain to bypass them. Just days later, last Thursday, assets worth approximately $6.3 billion were stolen from Binance, the world's largest crypto exchange. The U.S. Federal Bureau of Investigation attributed the attack to North Korea. Blockchain analytics firm Elliptic identified frozen or seized assets worth about $2.85 billion, roughly 44% of the theft. However, the attackers still controlled assets worth about $3.25 billion that no issuer can freeze, including Bitcoin and Ethereum. The article analyzes North Korea's difficulty in converting stolen assets into usable money, citing U.S. sanctions on intermediaries and losses of 12%-26% in conversion transactions. The conclusion: Israel should strive for a reality where the world wants to buy what it develops, rather than relying on financial workarounds.