In short
- A new FATF report claims that the use of crypto has grown exponentially by Sanctioned States.
- Stolen virtual assets, including $ 1.5 billion from Bybit, have financed the nuclear activities of Noord -Korea.
- An emerging coordination pattern under threat factors has been observed, claims an expert.
Cryptocurrency is increasingly enabling sanctioned states such as North Korea and Iran to finance illegal arms programs, according to a June 2025 report By the Financial Action Task Force (FATF), an intergovernmental organization that was founded by G7 -Landen more than three decades ago.
The global watchdog identifies blockchain-Based assets such as critical vulnerabilities exploited by proliferation finance networks, which incidents such as theft of North Korea of $ 1.4 billion from Crypto Exchange Bybit in February, facilitated by mixing, non -sized exchanges.
“The threat is real and grows” Decrypt. The report “confirms what we have seen in the crypto security space for years: countries such as Noord -Korea are becoming increasingly skilled in the use of stolen crypto to finance weapons programs.”
Threat groups such as Lazarus, known for cyber crime that is linked to Pyongyang, have played an important role in such operations, the FATF report claims.
“Many illegal actors try to increase anonymity in virtual asset transactions by using virtual assets mixtures and anonymity that improves cryptocurrencies (AECs),” the report said.
Those services help with the “money laundering process” for “large-scale virtual assets robbery” that support the proliferation of mass destruction weapons (WMDS), the FATF claimed.
In the meantime, the inherent characteristics of Crypto make it especially attractive for sanctioned actors, O’Connor argued.
“Crypto gives sanctioned states a powerful mix of global access, pseudonymity and weak enforcement. In contrast to traditional banking, Blockchains runs 24/7, without central authority,” O’Connor explained. “That makes it easy to move money quickly and use gaps in compliance.”
“In sight”
Platforms such as Exch, recently closed because of his involvement in the Bybit -Hack, could cash in threat actors and organizations such as the Lazarus Group “Funds in sight,” said O’Connor.
The FATF report is strongly based on studies by Blockchain Analytics Firm chain analysis, including an extensive investigation into how crypto transactions link evidence to a network of Chinese fentanyll suppliers to Mexican cartels.
But after the report warnings, according to O’Connor, an emerging pattern of geopolitical coordination that is financed by crypto has emerged.
“What is more worrying is how these networks are starting to overlap,” O’Connor said Decrypt. North Korean agents are reportedly ‘active in the war in Russia-Ukraine’, in which ‘Iranian drones’ are used by Russian troops.
There are also indications that Iran and Russia have “built joint drone factories,” said O’Connor, stating report His team has assessed.
Iran, which has been in conflict with Israel for almost two weeks, has been familiar with “militarized proxies in the middle, as well as a range of transnational criminal organizations” to “limit the impact of economic sanctions,” said the FATF report.
“Crypto plays a key role in financing and supporting this type of coordination, calm and on a scale,” O’Connor warned.
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