US Treasury Sanctions Web of North Korean Bankers Tied to Global Crypto Crime Operation

The U.S. Treasury Department issued sanctions Tuesday against a slew of expat North Korean bankers, who are accused of laundering stolen crypto to aid the pariah state’s weapons programs.

Eight such bankers, primarily based in China and Russia, were sanctioned today for their role in allegedly laundering funds destined for North Korea. 

A portion of those funds were traced back to crypto thefts pulled off by North Korean ransomware attackers and IT-related scams, the Treasury said.

The fresh sanctions also hit two implicated North Korean companies, and 53 crypto wallet addresses associated with the accused money launderers. Every one of the blacklisted wallets was noted by the Treasury as containing USDT, the popular stablecoin issued by Tether. 

“By generating revenue for Pyongyang’s weapons development, these actors directly threaten U.S. and global security,” John Hurley, under secretary of the Treasury for terrorism and financial intelligence, said Tuesday in a statement. “Treasury will continue to pursue the facilitators and enablers behind these schemes to cut off the DPRK’s illicit revenue streams.” 

Tuesday’s announcement noted that key to North Korea’s ability to evade sanctions is its use of internationally located financial representatives, who are able to launder funds obtained primarily through crypto heists via international markets. 

In less than two years, North Korean operatives have managed to steal nearly $3 billion worth of cryptocurrency globally, according to a recent report. Earlier this year, hackers from the country allegedly stole $1.4 billion worth of ETH and related tokens during a single, rapid-fire heist of crypto exchange Bybit.

A key facilitator of the laundering of those funds has been underground Chinese banking networks, which often do the actual work of cleaning North Korea’s stolen crypto via elaborate methods, blockchain security experts told Decrypt earlier this year.

Last month, the Department of Justice announced the seizure of $14 billion—the largest asset seizure in DOJ history—from a Cambodian crypto scamming operation experts said was closely linked to those same underground Chinese money laundering networks. 

The action appeared to indicate, to the experts, that the U.S. government is attempting to “systematically dismantl[e]” the interconnected global network fueling crypto crime.