North Korea Loses $7.74 Million in Cryptocurrency Seized by US

The United States Department of Justice has seized $7.74 million in cryptocurrency linked to North Korean IT workers. The funds, which were laundered to avoid U.S. sanctions, were used to support North Korea’s weapons programs. The seizure was part of a civil lawsuit filed in the District of Columbia, targeting assets connected to Sim Hyon Sop, a representative of the North Korean Foreign Trade Bank, who was indicted in April 2023.

North Korean IT workers used fake identities to secure jobs with U.S. and international firms, earning millions in cryptocurrency. These workers employed sophisticated tactics to hide their finances, including creating accounts with bogus identities, pushing small quantities into the shadows of transactions, and using chain hopping, token swapping, and purchasing non-fungible tokens (NFTs) to conceal the source of the funds. The laundered money was then mixed and sent to North Korean authorities.

Kim Sang Man, CEO of Chinyong IT Cooperation Company, led the scheme linked to North Korea’s Ministry of Defense. Despite being included on the U.S. Treasury’s list of sanctioned entities in 2017, the company continued its operations. The U.S. Attorney emphasized that sanctions exist to stop such schemes and that the Justice Department will pursue those who evade them.

The investigation was conducted by the Virtual Assets Unit and the Chicago Field Office of the Federal Bureau of Investigation (FBI), with assistance from the State Department and the Treasury Department. This seizure follows a series of measures taken by the Justice Department to disrupt North Korea’s financial networks and generate income for the regime. The Justice Department launched the DPRK RevGen, Domestic Enabler Initiative in March 2024 to drive these efforts.

The forfeiture is part of a broader crackdown on North Korea’s illicit financial dealings. The Justice Department has previously gone after $250 million worth of stolen cryptocurrency from exchange hacks laundered through Chinese traders in 2020. These efforts highlight North Korea’s reliance on cybercrime to fund its regime.

Authorities stated that the IT workers’ funds financed North Korea’s military and weapons programs. The purchase of goods using the laundered crypto violates the International Emergency Economic Powers Act. The Justice Department remains focused on disrupting North Korea’s financial networks and identifying and seizing additional assets associated with sanctions evasion.