The US Treasury Department has identified over-the-counter-based cryptocurrency traders who helped North Korea’s Lazarus Group convert stolen cryptocurrency into current money. The Treasury’s Office of Foreign Assets Control (OFAC) has sanctioned cryptocurrency traders from China and Hong Kong. Additionally, a China-based banker was sanctioned for coordinating part of the illicit money flow.
Wu Huihui was sanctioned by OFAC for “providing material support to Lazarus Group,” the North Korean hacker group known for some of the biggest exploits within the crypto ecosystem. According to a statement released by the Treasury Department on April 24, China-based Wu converted millions of dollars worth of crypto into fiat currency for North Korean “cyberactors” in multiple transactions in 2021.
The Chinese government severely restricts cryptocurrency trading, but OTC transactions are still possible. Treasury said in its statement:
“Actors in the Democratic People’s Republic of Korea often use […] networks of over-the-counter traders, including traders based in the People’s Republic of China (PRC), to transact on their behalf in order to avoid detection by financial institutions or law enforcement authorities.”
Cheng Hung Man, a British citizen based in Hong Kong, was sanctioned for providing material support to Wu. He allegedly helped Wu gain access to the US financial system by using shell companies to avoid detection.
Sim Hyon Sop, North Korean living in China, is a deputy representative of Korea Kwangson Banking Corp. He was sanctioned for allegedly coordinating financial transfers from various traders, among them Wu and Cheng, who ended up supporting North Korea’s weapons of mass destruction and ballistic missile programs.
The US Department of the Treasury’s #OFAC has just issued more sanctions targeting North Korea’s #crypto-enabled sanctions evasion activity.
Today OFAC sanctioned Wu HuiHui and Cheng Hung Man, China and Hong Kong-based OTC #cryptocurrency brokers…https://t.co/bLoqlVyMYo
— Jay “TechAdept” Laurence (@TechAdeptRDD) April 24, 2023
The Justice Department has also announced that it has unsealed two indictments against Sim, charging him with conspiring with over-the-counter traders to use stolen funds to purchase goods for North Korea and North Korean IT workers to generate revenue. through illegal employment in the United States. The federal indictments against Wu, Cheng and Sim were filed on April 18. Treasury said the Federal Bureau of Investigation and the South Korean government were involved in the investigation.
Tobacco products and communication devices were also included in the list of goods that North Korea obtains with fiat money from the exploits of crypto projects. Lazarus Group has been linked to the Harmony Bridge hack, Ronin Bridge and other major exploits.
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