How to hit back at North Korea for Sony cyberattack

Sony hack points to North Korea: Expert

The United States cannot hope to launch a dollar-for-dollar proportional response to North Korea's suspected cyberattack on Sony, a former special envoy to the communist country told CNBC on Friday.

The United States and United Nations have applied sanctions to North Korea over the years with minimal effect on its regime's behavior, former ambassador Jack Pritchard told "Squawk Box." U.S. leaders should instead look at targeting the country's financial system through an indirect approach.

"If you take a look at putting some sanctions or some limits on those foreign companies dealing with North Korea that provide a benefit, you may get North Korea's attention," he said.

Read MoreSony hack: How the US could retaliate against North Korea

This method worked in 2005 when the U.S. froze about $25 million in North Korean money held at Macau-based bank Banco Delta Asia, he said. North Korea "absolutely went ballistic over the freezing of that fund," he added, and it got the regime back to the negotiating table.

The U.S. could impose sanctions on companies such as Egyptian telecommunications firm Orascom, which is providing mobile communications infrastructure in North Korea, he said.

Senior White House officials believe North Korea commissioned the cyberattack on Sony in response to the studio's now scuttled release of "The Interview," a comedy in which two journalists are recruited to assassinate the country's leader Kim Jong Un.

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