Key Takeaways:
- The U.S. Department of Justice targets North Korean IT workers for evading sanctions through illicit cryptocurrency earnings.
- Over $7.74 million linked to the scheme has been seized, highlighting a sophisticated laundering operation involving stolen identities and blockchain tactics.
- The effort is part of a broader initiative to dismantle North Korea’s financial networks sustaining its authoritarian regime.
The Department of Justice (DOJ) initiated a civil forfeiture complaint in the U.S. District Court for the District of Columbia, accusing North Korean IT personnel of illicitly securing employment and generating millions in cryptocurrency to benefit the North Korean government.
The complaint alleges that these employees used deceptive methods, including identity theft and digital obfuscation, to bypass U.S. sanctions and send money to North Korea.
This legal action is a follow-up on a 2023 indictment of a North Korea Foreign Trade Bank representative named Sim Hyon Sop, accused of having conspired with IT agents. More than $7.74 million concerning this network has been successfully frozen and confiscated by the government.
Cryptocurrency Laundering Tactics Uncovered
The complaint states that the North Korean IT workers used several advanced techniques for money laundering involving the cryptocurrency that they collected.
These tactics included opening accounts with fictitious identities, transferring smaller amounts multiple times to evade detection, and swapping assets through different blockchain networks.
They also employed non-fungible tokens (NFTs) to mask their illicit profits besides using U.S.-based online platforms to legitimize their activities.
These finances were sent back to North Korea after being laundered, frequently through middlemen like Sim Hyon Sop and Kim Sang Man, who is running the Chinyong IT Cooperation Company under the Ministry of Defense in North Korea. This company offers off-site IT services in countries like Russia and Laos.
Broader Efforts to Counter North Korean Financial Evasion
This forfeiture complaint is one aspect of a sweeping effort undertaken by the DOJ and federal agencies to disrupt the financing of the regime of North Korea through illicit means.
A number of individuals and entities participating in those schemes have been hit with multiple indictments and enforcement actions since the beginning of 2023.
This campaign, which the FBI Cyber Division and Counterintelligence Division have supported and synchronized with the Treasury and State Departments, aims to disrupt North Korea’s sanction evasion through exploitation of global IT contracting as well as cryptocurrency ecosystems.
Advisories and guidance have been updated for U.S. companies to help them become more aware and more vigilant about these complex threats.
The FBI is investigating and prosecuting individuals as well to disrupt financial networks that would support North Korea’s destabilizing activities.
Related Reading | TRON (TRX) Price Poised for Reversal: Bull Flag Signals $0.50 Target in Sight