N.Korea 'Relies on Bitcoin to Fund Nuclear Weapons'

North Korea is relying on Bitcoin to fund its nuclear weapons development program, according to a study by the U.K.'s Royal United Services Institute for Defence and Security Studies.

One cryptocurrency exchange has been slapped with sanctions by the U.S. government due to suspicions of laundering North Korean money, which has also affected a South Korean exchange.

The institute said Monday that cryptocurrencies like Bitcoin are providing a "financial lifeline" to North Korea as it pursues the development of weapons of mass destruction.

Kayla Izenman at the institute told the Independent, "Given the large amounts of cryptocurrency we're looking at from these exchange hacks and the possibility of more coming from mining operations, it is reasonable to assume that the money may be directly financing North Korea's WMD program."

"At the very least, cryptocurrency exploitation is allowing North Korea to transact with the rest of the world in ways that aim to circumvent sanctions designed to curb its proliferation financing," she added.

The UN Security Council said in a report in March that North Korea is presumed to have amassed around US$6.7 million worth of Bitcoin and other cryptocurrencies.

Meanwhile, South Korean cryptocurrency exchange UPbit is suspected of helping to launder North Korean money because of its cross-transactions with Bittrex of the U.S., which is being targeted by American authorities for opening an account for North Koreans.

The New York State Department of Financial Services has refused to issue a license to Bittrex after a probe of transaction records uncovered two accounts held by North Koreans and two by Iranians.

Bittrex denied the allegations and said an internal probe showed that the North Korean accounts were owned by South Koreans who mistakenly specified their nationalities as North Korean.