U.S and UAE Crack Down on North Korea’s Illicit Crypto Network

• Two Chinese nationals and a UAE company were sanctioned for crypto laundering linked to North Korea.
• The UAE and the U.S. collaborated to disrupt the illicit crypto money laundering network.

The U.S. Treasury Department, in coordination with the UAE, has imposed sanctions on two Chinese nationals and a UAE-based company for their involvement in laundering millions in cryptocurrency for North Korea. This action underscores the U.S. commitment to countering financial networks that support North Korea’s illicit activities.

The Treasury’s Office of Foreign Assets Control (OFAC) designated Lu Huaying, Zhang Jian, and Green Alpine Trading LLC for their roles in this scheme. Both Lu and Zhang, based in the UAE, allegedly converted stolen cryptocurrencies into fiat currencies to fund North Korea’s prohibited programs. Green Alpine Trading LLC, operating as a front company, was instrumental in moving illicit funds tied to North Korea’s operations.

Sim Hyon Sop, a North Korean banking representative previously sanctioned by OFAC, directed the network’s activities. Authorities accuse Sim of orchestrating the laundering of cryptocurrency stolen in cyberattacks carried out by North Korean operatives.

Links to Cybercrime and DPRK Weapons Programs

North Korea’s dependence on cybercrime and cryptocurrency theft has become a critical source of revenue for its weapons development. High-profile cybercrime groups, such as the Lazarus Group, have been responsible for significant heists, including the $600 million Ronin Network breach in 2022. Such thefts reportedly account for nearly half of North Korea’s foreign currency earnings.

Under OFAC’s sanctions, all property and interests of the designated persons within U.S. jurisdiction are blocked. Additionally, financial institutions that facilitate transactions for these individuals risk severe penalties. OFAC’s rules extend to non-U.S. persons who aid in evading these sanctions, emphasizing the global reach of these measures.

The U.S. aims to dismantle the financial structures enabling North Korea’s destabilizing actions, including its development of weapons of mass destruction and ballistic missiles.

The UAE’s cooperation played a crucial role in identifying and disrupting this network. Treasury Acting Under Secretary Bradley T. Smith highlighted the importance of addressing North Korea’s complex schemes, including fraudulent IT work, digital heists, and money laundering.

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