Treasury sanctions $50M crypto laundering network for North Korea

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has sanctioned two individuals and a company connected to North Korea’s money laundering activities.

According to the official press release, Lu Huaying and Zhang Jian, based in the UAE, used a front company to facilitate the conversion of cryptocurrency into fiat currency and moved the proceeds back to North Korea.

Sim Hyon Sop, a representative of the DPRK’s Korea Kwangson Banking Corp (KKBC) in China, is also linked to these illegal activities.

Sim has been accused of organising money laundering operations, creating shell companies, and managing bank accounts to move illicit funds.

The OFAC had previously designated Sim and KKBC under Executive Order 13382, which targets entities linked to the proliferation of weapons of mass destruction.

Huaying has been involved in laundering illicit funds from North Korean activities since 2022.

Between 2022 and September 2023, Huaying used money mules and other methods to help convert cryptocurrency into fiat.

Jian assisted in these activities, including facilitating the exchange of fiat currency and acting as a courier for Sim.

In response, the OFAC has designated Huaying, Jian, and Green Alpine Trading, LLC, a UAE-based company involved in the network.

“As the DPRK continues to use complex criminal schemes to fund its WMD and ballistic missile programs – including through the exploitation of digital assets – Treasury remains focused on disrupting the networks that facilitate this flow of funds to the regime,” commented Bradley T. Smith, Acting Under Secretary of the Treasury for Terrorism and Financial Intelligence.

North Korea’s cybercrime operations continue to target the crypto industry.

Recently, the Lazarus Group, linked to North Korea, was involved in several high-profile thefts, including the 2019 Upbit hack and the $50 million hack of Radiant Capital in October 2024.