US shuts down North Korean crypto laundering network

The US Treasury Department’s Office of Foreign Assets Control imposed sanctions on two individuals and a company in the United Arab Emirates on the grounds that they facilitated North Korea’s illegal use of digital assets.

The sanctions target Lu Huaying and Zhang Jian, both based in the UAE, and Green Alpine Trading, LLC, a shell company linked to a broader money laundering scheme.

According to the US government, these sanctions and actions are aimed at disrupting a network that allegedly funnels millions of dollars into North Korea’s weapons of mass destruction and ballistic missile programs.

North Korea is known to leverage digital assets and cybercrime to finance its nuclear weapons and missile development. The regime employs IT workers and hackers to raise funds, often masking their origins with sophisticated money laundering operations.

The sanctioned individuals and the UAE-based company reportedly operated under the management of Sim Hyon Sop, a representative of North Korea’s state-run Korea Kwangson Banking Corporation, which was previously sanctioned.

Sim is accused of using a combination of cryptocurrency cash flows and money mules to launder money. The funds were then transferred back to North Korea to finance its military programs. Both Lu and Zhang allegedly aided these efforts by converting cryptocurrency into traditional currency and acting as couriers.

Consequences of sanctions

Within the scope of the sanctions imposed, any property owned by designated individuals or organizations in the USA is blocked. US citizens and companies are prohibited from transacting with them.

According to OFAC, failure to comply with these measures may result in additional sanctions, including against individuals or businesses outside the United States.

The US government worked jointly with the UAE to impose these sanctions, signaling a coordinated effort to counter North Korea’s destabilizing activities. This move underscores the critical role of international cooperation in targeting illicit financial networks that leverage emerging technologies such as cryptocurrencies.