US imposes sanctions on North Korea’s crypto laundering network

The U.S. Treasury Department sanctioned two individuals and one entity for laundering cryptocurrencies for the North Korean Democratic People’s Republic of Korea (DPRK).

Two Chinese nationals, Lu Huaying and Zhang Jian, helped the crypto money laundering as part of a more extensive illicit network headed by a sanctioned DPRK banking representative named Sim Hyon Sop, according to the Treasury’s Office of Foreign Assets Control (OFAC).

Li and Zhang worked at a front company in the United Arab Emirates named Green Alpine Trading, which allegedly served as a core component of the money laundering network. The company has been designated as a sanctioned organization.

“The DPRK continues to use agents and proxies to access the international financial system to conduct illicit financial activities, including fraudulent IT work, digital assets heists, and money laundering, in support of its unlawful WMD and ballistic missile programs.” the statement said.

North Korea-backed hacker groups, including the Lazarus Group, are accused of orchestrating some of the largest hacks in crypto, such as the $600 million hack of the Ronin Ethereum sidechain in 2022.

One common tactic reportedly employed by North Korean hackers is disguising themselves as recruiters or high-level executives in crypto investment companies. 

Blockchain security firm SlowMist previously stated that a member of the Lazarus hacker group impersonated an executive member of Chinese blockchain asset management firm Fenbushi Capital to lure LinkedIn users into clicking malicious links.

North Korea’s state-backed crypto hacker groups earned the country around 50% of its foreign currency, a large share of which was allegedly used for developing weapons of mass destruction, South Korea's Yonhap News Agency reported in March this year citing the UN Security Council.