The U.S. Treasury Department has assessed that North Korea is abusing decentralized finance services to fund its program to develop weapons of mass destruction(WMD).

The Treasury presented the assessment in a report titled "Illicit Finance Risk Assessment of Decentralized Finance" published on Thursday that analyzed the role of such services, abbreviated in the report to "DeFi."

In the report, the Treasury said that illicit actors, including ransomware cybercriminals, thieves, scammers, and North Korean cyber actors, are using DeFi services in the process of transferring and laundering their illegally acquired proceeds.

The term “DeFi” commonly refers to virtual asset protocols and services purporting to allow automated peer-to-peer transactions based on blockchain technology.

The Treasury said that DeFi services that are non-compliant with controls against money laundering and the financing of terrorism pose the most significant risk of illicit finance.

The report said that North Korea, under sanctions and pressure from the U.S. and the UN, is increasingly turning to the theft of virtual assets from virtual asset service providers and DeFi services.