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The US Department of Justice has initiated actions to confiscate $7.74 million in cryptocurrency reportedly acquired by North Korean IT professionals utilizing fabricated identities and operating as remote contractors for blockchain companies.
The assets were originally frozen in April 2023 in connection with an indictment against Sim Hyon Sop, a banker in China alleged to aid North Korean IT employees in laundering illicit funds, the DOJ stated in a June 5 announcement.
The Justice Department seeks to confiscate various cryptocurrencies, including stablecoins and Bitcoin (BTC) in differing quantities, alongside non-fungible tokens and Ethereum Name Service domains stored in various self-custody wallets and Binance accounts, as per its civil forfeiture complaint lodged June 5 in a federal court in Washington, DC.
Matthew Galeotti, head of the Justice Department’s criminal division, remarked that this case underscores how the North Korean regime attempts to exploit the “cryptocurrency ecosystem to finance its unlawful objectives.”
“The Department will employ every legal instrument at its disposal to protect the cryptocurrency ecosystem and deny North Korea its illicit earnings in breach of US sanctions,” he stated.
The DOJ alleged that the North Korean IT employees who garnered the cryptocurrency were active in various nations and deployed fraudulent identification documents along with other evasive techniques to secure jobs.
IT professionals believed to launder proceeds from illicit activities
Upon receiving payment, often in stablecoins such as USDC (USDC) and Tether (USDT), the IT professionals are said to have employed laundering methods, including chain hopping and token exchanges to NFTs, to obscure the origins of the funds.
The Justice Department asserted that the funds were intended to be transferred back to the North Korean government through Sim and Kim Sang Man, another individual from North Korea sanctioned by the OFAC for money laundering activities.
In recent times, North Korea has intensified its initiatives to penetrate the crypto sector and generate funds to dispatch back to the isolated nation.
Google’s Threat Intelligence Group published an April report illustrating North Korea’s expansion of its penetration efforts toward blockchain companies outside the US amid heightened scrutiny from regulators, with a specific concentration on Europe.
Related: G7 summit might address North Korea’s crypto hacks: Report
Meanwhile, blockchain analyst ZachXBT reported last August he discovered indications of a sophisticated network of North Korean developers earning up to $500,000 monthly while working on “established” crypto projects.
In 2022, the DOJ, Department of State, and Treasury issued a collaborative advisory warning regarding the surge of North Korean workers venturing into various freelance tech roles, particularly in crypto.
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