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North Korea has been laundering money through a blockchain company it set up in Hong Kong, in a move designed to evade international sanctions against the rogue state.

The allegations were made in a report by the U.N. Security Council’s Sanctions Committee on North Korea, after suspicions were raised around a shipping and logistics firm set up in Hong Kong called Marine China, The Chosun Ilbo reported.

The report details the findings of the committee’s investigations, which point to the blockchain-powered shipping company being used as a front for laundering millions in cryptocurrency into cash, under the radar of the authorities at the U.N.

The sole owner of Marine China was found to be an individual named Julian Kim, alias Tony Walker. He was found to have attempted to withdraw substantial sums of money from the company on several occasions at banks in Singapore.

According to the committee’s report, the shipping company was involved in some 5,000 crypto transactions running through several different countries, which it says made source of funds difficult to trace.

Nevertheless, the report points to strong evidence of a North Korean money laundering operation, which could account for substantial amounts of cryptocurrency being laundered into cash.

North Korea is currently excluded from international payment systems, subject to stringent international sanctions in connection with its development of its nuclear program, amongst other issues.

By running crypto transactions through the blockchain firm in Hong Kong, the North Korean state is alleged to have effectively evaded these sanctions, by providing an off-grid route to accessing cash.

Aside from the money laundering, the report also found evidence of further crypto scams and frauds being perpetrated from within North Korea, including children being groomed into hackers and cyber thieves under the control of the state.

The report also found evidence of widespread hacks from North Korea using a technique known as “spear-fishing,” thought to have led to thefts totaling over $2 billion.

The findings show that North Korea is continuing to abuse cryptocurrency and blockchain technology for evading international sanctions and encouraging cybercrime.

Yet while the U.N. has highlighted these issues, it remains unclear how agencies can work to stop the North Korean government from exploiting these opportunities for criminality.

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