Crypto-Fuel Refueling Weapons Program for Authorized States: FATF

Cryptocurrency It is increasingly enabling authorized states such as North Korea and Iran to fund illegal weapons programs, according to a June 2025 report by the Financial Action Task Force (FATF), an intergovernmental organization established by G7 countries more than 30 years ago.

Global Watchdog is identified Blockchain– Citing cases such as the North Korean $1.4 billion theft from Crypto Exchange Bybit in February, the base assets as a critical vulnerability exploited by the proliferation finance network will be facilitated by services, non-wallets and weakly regulated exchanges.

“The threat is real and growing,” said Jeremiah Connor, chief technology officer for Webcy, a digital asset security and risk management platform. Decryption. The report said, “We see what we’ve seen for years in the crypto security space. Countries like North Korea are increasingly skilled at using stolen cryptography to fund weapons programs.”

Threat groups like Lazarus, known for cybercrimes associated with Pyongyang, play a key role in such operations, the FATF report argues.

“Many illegal actors are using virtual asset mixing services and anonymous enhanced cryptocurrency (AEC) to increase the anonymity of virtual asset transactions,” the report said.

These services will help in the “laundry process” of “large virtual asset robberies” that will support the surge in weapons of mass destruction (WMDS), FATF argued.

Meanwhile, O’Connor argued that Crypto’s inherent properties are particularly appealing to licensed actors.

“Crypto gives licensed states a powerful combination of global access, pseudonyms, and weak enforcement. Unlike traditional banks, blockchain runs 24/7 across boundaries with no central authority,” explained O’Connor. “This makes it easier to move money quickly and misuse gaps in compliance.”

“Outlook”

Platforms like the exchange were recently shut down due to involvement in the Buybit Hack, and are said to have allowed threat actors and organizations such as the Lazarus Group to “visibly cash out funds.”

The FATF report is heavily guided by a survey from a blockchain analytics company chain analysis, including extensive research into how Crypto Transaction connects to a Mexican cartel with a network of fentanyl suppliers in China.

But beyond the report’s warning, new patterns of geopolitical adjustments funded by Crypto have emerged, according to O’Connor.

“What’s more concerning is how these networks are beginning to overlap,” O’Connor said. Decryption. North Korean operatives have been using “Iranian drones” by the Russian military, and are reportedly “actively active in the Russian-Ukurein War.”

There is also evidence that Iran and Russia are “building a joint drone factory,” O’Connor said he reports that his team reviewed it.

Iran has been in conflict with Israel for almost two weeks and relies on a “militarized proxies in the Middle East and an array of multinational criminal organizations” to “mitigate the effects of economic sanctions.”

“Crypto plays a key role in maintaining this kind of coordination quietly and at a large scale,” O’Connor warned.