Week 8: Knowledge-based policy

This week, we have been focusing on transferring the knowledge gained throughout the class into our final deliverable – a policy paper which we hope to present to decision makers in the field of DPRK sanction enforcement.

Why a policy paper:

“The government is slow to catch up on these things”

Former Treasury Expert

While there is a lot of subject-matter knowledge available through both classified and unclassified channels, throughout our journey we have touched upon a number of areas ranging from maritime interdiction, to traffic pattern mapping to tackling cryptocurrency-based money laundering schemes. We believe that all of them contribute towards our ability to exert maximum pressure on the North Korean Regime, and thus want to convey our gathered knowledge so that policymakers have a cross-spectrum grasp of actions that can be taken in the area.

Our Focus:

“North Korea’s stockpile of cryptocurrency is worth $700 Million, analysts say.”

United Press International

According to various estimates, this figure would place DPRK stockpile of cryptocurrency at ~3% of their GDP. This is a substantial amount, especially as with the evolution of the digital finance sector it becomes easier to use those funds for obtaining resources (such as refined petroleum, electronics or luxury goods) illegally. We have reasons to suspect that cryptocurrencies are also one of their main sources of fiat (hard) currency.

Paper outline:

  • Review of Applicable Sanctions Theory
  • Summary of North Korean Sanctions Environment
  • Description of cryptocurrency’s role in that space
  • Outline of potential avenues of disruption related to North Korean Cryptocurrency use
  • Recommendations related to how decision makers should be thinking about cryptocurrency tools and where responsibility for addressing the issue should lie

Intended presentation recipients:

Deployment:

As we’re preparing a policy-based solution, rather than a deployable software/hardware based product, we wouldn’t be following the traditional procurement approach or securing funding for setting up a company. However, for the purpose of familiarising the policymakers with our findings, we have created a proposed timeline of events if our proposals are to be implemented.


Same diagram as above with cost flows superimposed.

Interviews this week:

This week, we have focused on getting feedback on our suggested approach. We have talked to cryptocurrency investors, cybersecurity experts and Paul Syversant, the co-creator of TOR. Overall, the ultimate goal has been to obtain validation of the main ideas within our paper and fine-tuning some of the details of our approach.

Next Steps:

  • Finalize Final Presentation of Lessons Learned
  • Complete draft white paper and circulate for feedback
    • Week 10 validation focus on improving white paper
  • Seek buy-in for wide distribution
    • Leverage networks of previous interviewees, the H4D teaching team, and the greater Stanford and Hoover community

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