U.S. seeks to confiscate $7.7 million in cryptocurrency related to North Korean IT workers
The U.S. Department of Justice (DOJ) has filed a civil forfeiture complaint in an attempt to seize approximately $7.74 million in cryptocurrency related to plans involving North Korean IT workers.
The funds are earned by remote workers using fake identities to gain employment at companies linked to blockchain, according to a June 5th press release from the Justice Department.
The men reportedly operated on behalf of the North Korean government, using the crypto ecosystem to evade U.S. sanctions and illegal corporate gains, returning to the Democratic People’s Republic of Korea (DPRK).
Remote employment, blockchain companies and money laundering strategies
The frozen funds are related to an ongoing investigation that began in April 2023 against North Korean foreign trade company representative Sim Hyon Sop.
SIM is accused of working with North Korean IT professionals to launder money through various strategies. The seized funds represent part of a broader effort by the North Korean government to use global cryptocurrency infrastructure to make revenues violated international sanctions, U.S. officials said.
According to a complaint from the Justice Department, the North Korean Democrats are increasingly deploying IT workers in jurisdictions including China and Russia to direct them to find jobs in blockchain and technology.
These workers allegedly bypassed Knowledge Client (KYC) and due diligence procedures by using stolen or forged documents to mask their identity and location. Their work is often compensated in stablecoins such as USDC or USDT, and the income is eventually washed and sent back to North Korea.
It is said that to cover up the origin of funds, workers engage in various washing techniques: beginning with false identities, performing multiple small transfers, switching between blockchains (“chain jumps”), converting assets into different cryptocurrencies, converting them into different cryptocurrencies (“token exchange”), and even non-currency costs (nfts) (nfts) (nfts) (nfts), nfts nfters nftor valo valo valo valo.
These proceeds are reportedly transferred through online U.S. platforms and are committed to avoiding detection, which is then transferred to North Korean entities through intermediaries such as SIM and Kim Sang Man.
Global coordinated goals to evade sanctions
Kim Sang Sang, named in an application filed by the Justice Department, is said to be the CEO of Chinyong, also known as the Jinyong IT Partner Company, which operates under the leadership of the North Korean Ministry of Defense.
Chinyong is approved by the U.S. Treasury Department and is reportedly going to manage North Korean IT workers’ delegations in countries such as Russia and Laos.
Kim’s role allegedly involved transferring funds from IT staff to SIM, thus completing the crypto-money laundering cycle and returning to the North Korean government.
The case represents a broader strategic focus of U.S. agencies disrupting illegal financing networks. Officials from the Justice Department, the FBI and the National Security Office stressed that targeting North Korea’s digital income streams is crucial to imposing sanctions and limiting funding for military development.
It is also recommended that U.S. businesses review remote recruitment practices to detect potential confusion strategies that foreign participants may use.
Feature images created with DALL-E, TradingView’s chart
Editing process For Bitcoin experts, focus on thorough research, accurate and impartial content. We adhere to strict procurement standards and each page is diligently evaluated by our top technical experts and experienced editorial team. This process ensures the integrity, relevance and value of our content to our readers.
