The truce village of Panmunjom inside the demilitarized zone (DMZ) separating the two Koreas
A North Korean flag flutters at the propaganda village of Gijungdong in North Korea, in this picture taken near the truce village of Panmunjom inside the demilitarized zone (DMZ) separating the two Koreas, South Korea, July 19, 2022. Reuters

The United States, South Korea and Japan expressed deep concern over North Korea's "malicious" cyber activities to support its weapons programmes, in comments released in a joint statement on Friday.

Crypto currency funds stolen by North Korean hackers have been a key source for financing the sanctions-stricken country's weapons programmes, officials and experts in the United States and its allies say.

A new report released by the U.S. Treasury Department on April 6 said actors like North Korea were using decentralised finance (DeFi), a thriving segment in the crypto sector, to transfer and launder their illicit proceeds.

North Korea has denied allegations of hacking or other cyberattacks.

Amid North Korea's rising nuclear and missile threats, South Korea's nuclear envoy held talks with his U.S. and Japanese counterparts in Seoul this week and condemned the isolated country's weapons tests.

"We reiterate with concern that overseas DPRK IT workers continue using forged identities and nationalities" to evade U.N. sanctions and raise funds for missile programmes, according to the envoys' joint statement, using the acronym for North Korea's official name.

They called on United Nations member states to comply with U.N. Security Council resolutions to repatriate North Korean workers on their soil.

"We are also deeply concerned about how the DPRK supports these programmes by stealing and laundering funds as well as gathering information through malicious cyber activities," the statement said.

Tensions on the Korean Peninsula are running high. U.S. and South Korean forces have been conducting a series of annual springtime exercises since March.

Angered by those military exercises, Pyongyang has been ramping up its military activities in recent weeks. It unveiled new, smaller nuclear warheads and fired an intercontinental ballistic missile capable of striking anywhere in the United States.

As those exercises and tests continue, there has been an exchange of harsh rhetoric. On Thursday, North Korea accused Washington and Seoul of pushing tensions to the brink of nuclear war through their military drills.

Kim Gunn, South Korea's chief nuclear negotiator, said North Korea's nuclear ambition was "nothing more than a self-destructive boomerang" shattering its economy.

"North Korea is misguiding its people to believe that nuclear weapons are a magic wand that can solve all of its problems," Kim said in his meeting with U.S. and Japanese officials on Friday.

Japan on Friday announced a two-year extension of its trade ban on North Korea, with exemptions for humanitarian reasons.