Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment her Department has made of the vulnerabilities of cryptocurrency to North Korean criminals.

The Government is aware of reporting relating to the recent cyber activity linked to the DPRK, involving the cryptocurrency exchange ByBit. The UK works closely with our allies to deter all malign actors from conducting malicious cyber activity. This includes through targeted sanctions, public attributions and working closely with partners to encourage capacity building and cyber deterrence.

Under the Money Laundering Regulations, it is mandatory for banks and other financial institutions to apply enhanced due diligence to all transactions linked to North Korea to ensure they do not involve the proceeds of crime. In addition, the UK’s DPRK sanctions regime imposes broad restrictions of a financial nature, including prohibitions on UK financial institutions establishing or maintaining financial relationships with DPRK financial institutions. The Office of Financial Sanctions Implementation works to support UK businesses, including financial institutions, to comply with sanctions on the DPRK. This includes publication of advisory notices such as the Advisory on North Korean IT Workers published in September 2024.

Cryptoassets, specifically cryptoasset exchange providers and custodian wallet providers, have been regulated under the Money Laundering Regulations since January 2020. UK cryptoasset firms must register with the Financial Conduct Authority which acts as a supervisory body to ensure firms have appropriate systems in place to prevent money laundering. The money laundering risk these cryptoasset firms are exposed to will be assessed in the updated National Risk Assessment of Money Laundering and Terrorist Financing, due to be published later this year.