US Sanctions DPRK Hacker, Charges OmegaPro Founders Over $650 Million Crypto Scam

The United States has taken decisive actions against two significant threats: cyber operations by the Democratic People's Republic of Korea (DPRK) and a massive cryptocurrency investment scam orchestrated by the founders of OmegaPro. The Office of Foreign Assets Control (OFAC) has imposed sanctions on a DPRK hacker, Song Kum Hyok, who has been facilitating an illicit IT worker scheme to generate revenue for Pyongyang’s regime. This scheme involved DPRK nationals, often based in China and Russia, who were provided with falsified identities to secure employment at unwitting companies across the world, including in the US. These workers posed as foreign or US nationals using stolen names, Social Security numbers, and addresses to gain remote jobs, generating income that was shared with the accused and remitted to the DPRK to support its weapons and ballistic missile programs. Some DPRK IT workers also introduced malware into company networks for further exploitation.

In addition to Song, OFAC also sanctioned a Russian national, Gayk Asatryan, and four entities for facilitating a Russia-based IT worker pipeline to employ North Korean workers. Asatryan, who owns Asatryan LLC and Fortuna LLC, allegedly signed contracts with DPRK entities Korea Songkwang Trading General Corporation and Korea Saenal Trading Corporation in 2024 to dispatch up to 80 DPRK IT workers to Russia. The Treasury added that the DPRK maintains thousands of skilled IT workers globally who, under false identities, target employers in wealthier countries, using freelance and crypto platforms to earn and launder funds back to Pyongyang. OFAC stated that the actions are part of broader efforts to tackle North Korea’s revenue generation through cyber espionage and illicit labor, which directly support its prohibited weapons programs.

Concurrently, the Department of Justice (DOJ) has charged the founders of OmegaPro, Michael Shannon Sims and Juan Carlos Reynoso, with operating a multi-level marketing scam that defrauded investors out of over $650 million. The scheme involved the promotion of a cryptocurrency investment platform that promised high returns but ultimately failed to deliver. The DOJ's charges allege that the founders misled investors and used the funds for personal gain, rather than investing in legitimate cryptocurrency projects. Sims, 48, and Reynoso, 57, claimed that investors would receive 300% returns in 16 months using elite traders. Victims, who often used cryptocurrency, were misled about the safety of their funds and OmegaPro’s legitimacy. The defendants targeted vulnerable individuals globally, including in Puerto Rico, to enrich themselves. They also hosted lavish promotional events and showcased luxury lifestyles on social media to attract investors. Authorities allege OmegaPro funneled victim funds through cryptocurrency wallets controlled by insiders to conceal the scheme’s profits. In 2023, after claiming a network hack, OmegaPro transferred victim accounts to another platform, but investors could not recover their money. Sims and Reynoso each face charges of conspiracy to commit wire fraud and money laundering, carrying up to 20 years in prison per count.

The dual actions by the U.S. government highlight the increasing threat posed by cyber operations and financial scams. The DPRK's use of cyber espionage and cryptocurrency thefts to fund its regime is a growing concern, as it allows the country to circumvent international sanctions and continue its malicious activities. The OmegaPro scam, on the other hand, underscores the risks associated with cryptocurrency investments and the need for greater regulation and oversight in this rapidly evolving sector. The sanctions and charges serve as a warning to other actors engaged in similar activities, demonstrating the U.S. government's commitment to holding them accountable. The actions also underscore the importance of international cooperation in addressing these threats, as cyber operations and financial scams often transcend national borders. The U.S. government's efforts to disrupt these activities are part of a broader strategy to promote global security and stability.