The US Treasury’s Office of Foreign Asset Control (OFAC) has taken action against three individuals and one entity connected to a money laundering operation involving millions of dollars from illegal activities in North Korea. The two main suspects, Lu Huaying and Zhang Jian, who reside in the United Arab Emirates (UAE), have allegedly been using a front company based there to facilitate money laundering and cryptocurrency conversion processes before sending the profits back to Pyongyang.

In a recent press release dated December 17th, the OFAC announced that these actions form part of North Korea’s larger strategy to undermine international security and expand its military cooperation with Russia. The agency specifically named Sim Hyon Sop, a representative of the DPRK’s Korea Kwangson Banking Corp (KKBC), who operates out of the People’s Republic of China (PRC), as a key player in these illicit operations.

Her role involves orchestrating money laundering schemes, setting up shell companies, and managing bank accounts to move illicit funds around the globe. Furthermore, since 2022, it is alleged that Huaying has been involved in laundering millions of dollars derived from North Korean activities by converting cryptocurrency into fiat currency.

She used various methods such as money mules between 2022 and September 2023 to facilitate these transactions. Meanwhile, Zhang Jian assisted in the exchange of fiat currency and even acted as a courier for Sim. The OFAC has designated all three individuals and the UAE-based front company called Green Alpine Trading, LLC, due to their involvement in supporting Sim’s illegal activities.

This move by the Treasury department sends a strong message that they will not tolerate such actions that contribute to North Korea’s ability to finance its weapons programs. Unfortunately, North Korea’s involvement in cybercrime continues to cause significant harm within the crypto industry. Recent reports have revealed that North Korean hackers have executed several high-profile hacks and exploits resulting in millions of dollars being stolen from various projects.

One such incident involved a fake NFT game that utilized a Chrome zero-day flaw to steal wallet credentials and another where North Korean hackers were suspected of carrying out the 2019 Upbit crypto heist which resulted in $50 million worth of Ethereum being stolen.

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