North Korea Crypto Laundering Network Targeted by US Treasury Sanctions

The U.S. Treasury Department issued sanctions against a cryptocurrency laundering network linked to North Korea. The network allegedly supported the DPRK in bypassing international sanctions and funding illegal programs.

The U.S. Treasury Department announced sanctions on a cryptocurrency laundering network linked to North Korea. The network allegedly helped the DPRK bypass international sanctions and fund illegal programs.

Two individuals, Lu Huaying and Zhang Jian, were at the center of the operation. Both operated through Green Alpine Trading, a company based in the United Arab Emirates, which has now been designated by the Office of Foreign Assets Control (OFAC).

According to the Treasury, the operation was overseen by Sim Hyon Sop, a sanctioned representative of a North Korean bank. The laundering network supported activities ranging from fraudulent IT schemes to cryptocurrency theft, ultimately facilitating funding for the regime’s weapons programs.

North Korea-backed hacker groups, such as the Lazarus Group, have become known for large-scale cyberattacks. These groups are linked to some of the biggest crypto hacks in history, including the Ronin Ethereum sidechain hack, which led to the theft of $600 million in 2022.

These hackers use advanced techniques to carry out their operations. Blockchain security firm SlowMist reported that a member of the Lazarus Group posed as a senior executive from Fenbushi Capital, a Chinese blockchain firm. The hackers used LinkedIn to trick victims into clicking on malicious links, stealing their information in the process.

Reports indicate that these cyberattacks and North Korea crypto laundering serve as major funding channels for the DPRK. The revenue generated often goes towards supporting illegal activities, such as weapons development.

North Korea’s cryptocurrency theft operations account for nearly 50% of its foreign currency earnings, according to South Korea’s Yonhap News Agency. These funds have been used to bankroll weapons of mass destruction and ballistic missile programs, as reported by the UN Security Council in March 2024.

The sanctions on Green Alpine Trading, along with individuals like Lu Huaying and Zhang Jian, aim to disrupt these activities. However, the ongoing involvement of DPRK hackers showcases the challenges in curbing such operations.