Two have been sanctioned in connection with North Korea over cryptocurrency laundering operations.
In a recent statement by the US Treasury Department, the US in collaboration with the United Arab Emirates (UAE) has sanctioned Lu Huaying and Zhang Jian, for facilitating cryptocurrency laundering operations that benefit North Korea.
These sanctions target their UAE-based front company, Green Alpine Trading LLC, which reportedly converted millions in stolen cryptocurrencies into cash for the North Korean regime.
This action forms part of the U.S.’s broader effort to disrupt North Korea’s financial networks, which are used to fund illicit activities, including weapons of mass destruction (WMD) and missile programs.
According to the U.S. Treasury’s Office of Foreign Assets Control (OFAC), Huaying and Jian leveraged Green Alpine Trading LLC to launder cryptocurrency stolen by North Korean cybercriminal groups, such as the notorious Lazarus Group.
Their operations involved complex schemes to obscure the movement of funds, converting them into fiat currency, and funneling the proceeds back to the North Korean regime.
The UAE authorities played a significant role in identifying and targeting these individuals. All assets of the sanctioned individuals or entities within the U.S. or controlled by U.S. persons are frozen, and transactions with them are prohibited unless authorized by the Office of Foreign Assets Control (OFAC).
This includes entities owned 50% or more by these individuals. Violating these sanctions, such as providing or receiving funds, goods, or services to or from these individuals, may lead to penalties or enforcement actions.
North Korea has increasingly turned to cryptocurrency theft as a means of bypassing international sanctions and acquiring foreign currency. Cybercrime, including attacks on cryptocurrency exchanges and decentralized finance (DeFi) platforms, has become a cornerstone of North Korea’s strategy to sustain its regime amidst global isolation.
The funds laundered through such operations have been directly linked to the development of WMDs and ballistic missile programs. According to the Treasury, this highlights the critical need for global vigilance and cooperation to prevent these financial networks from operating unchecked.
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The U.S. Treasury views the Democratic People’s Republic of Korea’s reliance on cybercrime and digital asset theft as a critical method to fund its weapons of mass destruction and missile programs. This process is marked by the use of sophisticated schemes to launder stolen funds and bypass international sanctions.
To counteract this, the Treasury is actively working to disrupt the financial networks that enable these activities.
Treasury noted that partnering with the UAE and other international stakeholders, the United States aims to target entities and individuals supporting North Korea’s destabilizing activities. This effort reflects a commitment to protecting global financial systems and limiting resources flowing to the Kim regime, which uses these funds to sustain its illicit operations.
North Korean laundering networks are alarmingly sophisticated, employing advanced techniques to evade detection. They often use mixing services, front companies, and proxy agents to obscure the origins of stolen funds.
The Lazarus Group, for instance, is known for targeting cryptocurrency exchanges, stealing billions of dollars in cryptocurrencies over recent years. These stolen funds are systematically funneled into North Korea’s state coffers, making such operations a direct threat to global financial stability and security.
