US, UAE Disrupt North Korea’s Crypto-Funded WMD Pipeline

• Two Chinese nationals and a fake UAE company have been sanctioned for laundering crypto on behalf of North Korean agents.
• Crypto hacks resulted in $753 million by the end of Q3 2024, ahead of 2023’s $688 million.
• North Korean hackers have stoled at least $3 billion in crypto since 2017.

The U.S. and UAE have collaborated to disrupt a North Korean money laundering network that it used to funnel millions of dollars generated by its online hackers and cybercriminal networks.

Crypto Laundering Pipeline

As per a press release  from the Treasury’s Office of Foreign Assets Control (OFAC), two Chinese nationals and their UAE-based front company, Green Alpine Trading LLC, have been sanctioned for converting ill-gotten crypto into cash for the Democratic People’s Republic of Korea (DPRK).

Between “early 2022” and September 2023, the duo laundered “several million dollars” for Sim Hyon-Sop, a sanctioned China-based representative of the DPRK’s Korea Kwangson Banking Corp (KKBC). Sop is also wanted by the FBI . The release writes:

“Today’s sanctions are a part of ongoing efforts to disrupt the DPRK’s money laundering operations, which finance the regime’s unlawful weapons of mass destruction (WMD) and ballistic missile programs.”

OFAC highlights that the DPRK banking industry insider, Sop, is a notorious agent of the hermit state, known for creating and establishing complex money laundering pipelines for the North Korean regime.

The U.S. government has now blacklisted the two Chinese nationals and the UAE-based shell company, freezing all of their U.S.-owned assets. Sanctions may result in additional punishment for financial institutions found engaging with them.

North Korea Crypto Hacks

Despite being a recluse nation, the DPRK operates perhaps the most sophisticated—and successful—cybercriminal network in the modern era.

In 2023 alone, North Korean hackers were estimated to have bagged at least $600 million  in crypto and roughly $3 billion  since 2017.

North Korea’s bid to skirt economic sanctions has prompted it to establish a powerful crypto-hacking operations, with the Lazarus Group being one of the most notorious state-affiliated hacking teams.

Crypto hack investigations are still being attributed to Lazarus or North Korea as cases conclude, which is indicative of just how far the crypto-hacking tendrils of the DPRK stretch.