![]() ![]() Limiting bank accounts may no longer be enough, though. Recognising the role played by North Korean diplomats in raising funds for the state’s nuclear programme, in 2017 the UN limited the number of bank accounts per North Korean embassy to one, in an attempt to restrict access to the financial system. Previous cases of this in Paris, Rome and Warsaw indicate this activity generates funds for the regime, with diplomats using methods ranging from rerouting transactions to carrying large sums of cash across borders in diplomatic bags, destined for North Korea. Recent UN Panel of Experts reports highlight how North Korean embassy staff lease commercial and residential properties in return for rental income. Real estate is also a sector from which North Korea has profited. Second, by reselling items purchased with crypto for fiat currency, North Korea maintains its hard currency reserves. Luxury purchases, typically flagged as unsuspicious, are less likely to generate an alert as a potential link to North Korea. First, using cryptocurrency to purchase luxury items is likely to attract less attention from the traditional financial sector. The increasing use of cryptocurrency to purchase luxury goods poses financial and security risks globally. ![]() The regime values these effects beyond their material benefit, as luxury goods can be re-sold abroad to generate revenue for nuclear weapons. His possession of this yacht indicates a flagrant evasion of sanctions as yachts are categorised as luxury goods, prohibited by the UN for export and import by North Korea. High-Risk Sectors and the Role of CryptoĪlongside thoroughbred horses and Mercedes-Benz, Kim Jong-un is also a fan of mega yachts, highlighted by a recent trip to a secluded island off North Korea’s coast onboard his UK-made multi-millio n dollar boat. Poorly regulated professions including real estate agents, luxury goods vendors, and the casino and gambling sectors find themselves increasingly exposed to crypto-based proliferation financing risks. This latest attack reinforces the need for countries to monitor the rise of new cryptocurrency gateways that allow North Korea to circumvent sanctions and finance its nuclear weapons programme.Ĭryptocurrency use is growing in non-banking sectors, known as Designated Non-Financial Businesses and Professions (DNFBPs) by the Financial Action Task Force (FATF), the global financial crime watchdog. In this cyber attack, hackers stole $100 million worth of cryptocurrency, and began transferring funds in a similar manner to North Korea’s approach following the Ronin Bridge hack in March 2022. Blockchain analytics companies are identifying potential links between North Korea and the Harmony Bridge Exploit that occurred in June 2022. ![]()
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