This paper delivers critical insights into how North Korea exploits virtual asset-to-fiat conversion services to launder billions in stolen cryptocurrency, directly supporting its weapons of mass destruction program. By analysing the intersection of blockchain-based and traditional financial systems, the research identifies key vulnerabilities and offers actionable recommendations for the defence and security sector to mitigate proliferation financing risks.

Key Recommendations

• Regulatory Guidance: Issue clear guidance on managing correspondent relationships between Virtual Asset Service Providers (VASPs), especially when interacting with unlicensed VASPs, to reduce misuse and exploitation.
   
• Standardised Onboarding: Develop…