It has been widely reported that North Korea has been making use of cryptocurrencies, as well as crypto hacks and ransomware, for some time now in order to gain extra funds. The UN even reported that the figure they had garnered could amount to as much as $2 billion.

Through mining and crypto hacks, the North Koreas have managed to bring in a huge amount of extra revenue being used to fund weapons programs. However, the latest developments show how these funds have been laundered.

The North Koreans are now suspected of using a Hong Kong-based blockchain company to launder the money. This has again called the UN to task as they are investigating this allegation.

The United Nations Security Council’s Sanctions Committee has been investigating the various strategies allegedly employed by the North to evade sanctions using cryptocurrencies and other means.

To this end, they allege that “Marine China” — a blockchain-focused shipping and logistics firm registered in Hong Kong — was created by North Korean’s. Its owner and sole investor is purportedly an individual named Julian Kim, who also operates under the alias ‘Tony Walker.’

The operation drew the UN’s suspicions when a second individual, appointed by Kim, to head the firm, attempted to withdraw undisclosed sums of cash several times from Singaporean banks.

The UN investigation has reported that the cryptocurrency stolen by North Korea through 2018 converted into cash via at least 5,000 discrete transactions across multiple countries. The reason for this was to make the laundering activity difficult to track.

This report, along with the uncovering of other North Korea cryptocurrency activities, will no doubt paint the industry in a negative light. The fact that North Korea is, firstly, stealing crypto, and then being able to launder it with sophistication will ring alarm bells for cautious regulators.

More so, because it is expected that the cryptocurrency funds are being used for weapons programs, as well as to avoid sanctions, the governments involved in this standoff with the North Koreans will no doubt turn their ire towards cryptocurrency.

This does call into question a somewhat philosophical debate about the nature and freedoms of cryptocurrency as this method is being leveraged quite successfully for actions the UN and others deem illicit. However, it is not exactly the design of cryptocurrencies to be leveraged in such a manner.