North Korean bank official charged with cryptocurrency laundering conspiracies

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On Monday, a Washington, DC, district court released two federal indictments charging a North Korean bank official with his alleged role in cryptocurrency laundering conspiracies.

The first indictment accuses Sim Hyon Sop (Sim), a representative of the North Korean Foreign Trade Bank (FTB), of allegedly laundering funds “stolen from virtual asset service providers”, having transferred the funds in US dollars and used them to purchase goods, together with a group of over-the-counter crypto traders, according to the court filing. The alleged actions are in violation of current sanctions against North Korea by the United States and the United Nations.

The recently unsealed indictments represent a broader pattern in recent years of North Korean workers using virtual private networks (VPNs) and other tools to illegally obtain remote employment and redirect income to North Korea. .

Agents working on behalf of the country have also orchestrated other crypto-focused hacks in recent years, winning around $1.7 billion worth of crypto in 2022, according to a statement from the US Treasury Department. And in late 2017, hackers in North Korea gained access to around $75 million in virtual currency through a phishing campaign, according to the first indictment.

Sim, as part of the second indictment, was charged with conspiring with a group of North Korean computer scientists to launder approximately $12 million in illegally earned wages through computer development work in the United States. . The workers allegedly assumed fake identities to get jobs in blockchain development. companies based in the United States and abroad between 2021 and March 2023.

The IT workers demanded that their salaries be paid in cryptocurrency, for example, in stablecoins like USD Tether and USD Coin through US-based crypto exchanges, according to the indictment and a statement from the US Department of Health. Justice. They then allegedly worked with Sim to launder the proceeds and redirect them to North Korea, in part to ‘generate revenue for North Korea’s ballistic missile and WMD programs’, according to the indictment. .

Almost every month so far this year, North Korea has conducted tests of its intercontinental ballistic missiles, the last one taking place in mid-April.

While the FBI continues to investigate crypto laundering cases, money laundering charges carry a maximum of 20 years in prison, according to the DOJ statement. Sim and the other defendants are unlikely to stand trial, as they are believed to have been based in China and Hong Kong when the alleged crimes occurred, and the United States does not have an existing extradition treaty with China.

“The charges announced today respond to innovative attempts by North Korean agents to evade sanctions by exploiting the technological features of virtual assets to facilitate payments and profits, and by targeting virtual currency companies for theft.” , said Kenneth A. Polite, Jr., assistant attorney general. in the DOJ’s Criminal Division, said in a statement. “We will continue to work to disrupt and deter North Korean actors and those who help them by tracking money on the blockchain and bringing their conduct to light.”

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