YEREVAN (CoinChapter.com) — The U.S. Treasury Department issued sanctions against a cryptocurrency laundering network linked to North Korea. The network allegedly supported the DPRK in bypassing international sanctions and funding illegal programs.

U.S. Sanctions North Korea Crypto Laundering. Source: U.S. Department of State

Two individuals, Lu Huaying and Zhang Jian, were central figures in the operation. Both worked through Green Alpine Trading, a company based in the United Arab Emirates. The Office of Foreign Assets Control (OFAC) has now designated the company as a sanctioned entity.

According to the Treasury, the operation was managed under Sim Hyon Sop, a sanctioned representative of a North Korean bank. The laundering network supported activities including fraudulent IT schemes and cryptocurrency theft, facilitating funding for the regime’s weapons programs.

Lazarus Group’s Crypto Heists Raise Alarms

North Korea-backed hacker groups, like the Lazarus Group, have gained notoriety for large-scale cyberattacks. These groups are linked to one of the biggest hacks in crypto history: the Ronin Ethereum sidechain hack, which resulted in the theft of $600 million in 2022.

FBI Links North Korea to $620M Crypto Theft. Source: FBI National Press Office

These hackers employ sophisticated methods to execute their operations. Blockchain security firm SlowMist revealed that a member of the Lazarus Group impersonated a senior executive from Fenbushi Capital, a Chinese blockchain firm. The hackers used LinkedIn to lure victims into clicking harmful links, stealing information in the process.

Reports show that these cyberattacks and North Korea crypto laundering serve as major funding channels for the DPRK. The revenue generated often supports illegal activities, including weapons development.

North Korea Crypto Laundering Supports Weapons Programs

North Korea’s cryptocurrency theft operations account for nearly 50% of its foreign currency earnings, according to South Korea’s Yonhap News Agency. These funds have been used to finance weapons of mass destruction and ballistic missile programs, as reported by the UN Security Council in March 2024.

The sanctions on Green Alpine Trading, along with individuals like Lu Huaying and Zhang Jian, aim to curb these activities. However, the continued involvement of DPRK hackers highlights the challenges in combating such operations.