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- 1 Washington D.C. district court charges a North Korean bank official and others.
- 2 The two indictments revolve around crypto laundering conspiracy.
Regulators worldwide are trying to curb money laundering and are customizing regulations. On April 24, 2023, two federal indictments regarding laundering conspiracy were unsealed by Washington D.C. district court against a North Korean bank official and others.
The Indictment Against North Korean Individuals
The first indictment charges are against the North Korean Foreign Trade Bank (FTB) representative, Sim Hyon Sop (Sim), regarding allegedly laundering funds stolen from virtual assets service providers. These funds were then converted to U.S. dollars and used for purchasing goods along with the team of over-the-counter crypto traders.
These actions directly violate the ongoing sanctions against North Korea by the United States and the United Nations. Moreover, these recently unsealed indictments refer to a broader pattern utilized by North Korean workers in recent years. They use virtual private networks (VPN) and similar tools to allegedly obtain illegal employment and redirect generated revenue to the Democratic People’s Republic of Korea.
These operatives working on behalf of North Korea were involved in multiple crypto-focused hacks in recent years. They stole around $1.7 Billion worth of crypto in 2022 alone. The data was released in the indictment by the United States Treasury Department.
In the second half of 2017, North Korean hackers managed to gain access to around $75 Million worth of virtual currency through a phishing scam.
The second indictment charges Sim for engaging in a conspiracy with a group of North Korean IT workers who laundered around $12 Million in illegally-earned wages from IT development works in the United States. They used fake identities to gain employment at blockchain development firms based in the U.S. and abroad during 2021 and 2023.
These pseudo IT workers requested their salaries to be given in cryptocurrencies like USDT and USDC through U.S.-based crypto exchanges. This information was released in the indictment by the U.S. Department of Justice. These workers then worked with Sim to launder the earnings and transfer them to North Korea.
The indictment further suggests that all this was done to fund North Korea’s ballistic missile and Weapons of Mass Destruction (WMD) programs. In 2023 the country tested intercontinental ballistic missiles almost every month, with the latest test conducted in mid-April.
The Federal Bureau of Investigation (FBI) constantly investigates multiple crypto laundering cases. While the DoJ said that such crimes are punishable by a maximum sentence of 20 years.
Even if the indictments are unsealed, Sim and other charges might not face trials. Because at the time of the crime, they were based in China and Hong Kong; also, the United States has no extradition treaty with China.
Kenneth A. Polite, Jr., assistant attorney general in the DoJ’s criminal division, said that the charges announced are in response to the innovative attempt by the operatives from North Korea to circumvent sanctions. They skillfully exploited the technological features of digital assets to facilitate payments and profits and targeted virtual currency companies for theft.
“We will continue to work to disrupt and deter North Korean actors and those who aid them by following the money on the blockchain and shining a light on their conduct.” – Polite Jr.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
