The U.S. Department of Justice (DOJ) blocks digital assets worth 7.74 million USD transferred to North Korea through a fake remote IT labor network.
The U.S. Department of Justice (DOJ) has just announced filing a civil forfeiture request to recover over 7.74 million USD in cryptocurrency in a large-scale operation aimed at breaking North Korea's sophisticated money laundering network. This move marks a new escalation in the fight against Pyongyang exploiting blockchain technology to evade international sanctions.
According to the DOJ's allegations, these funds were created by North Korean IT workers operating secretly by falsifying identities and geographical locations to obtain jobs at companies primarily based in the United States. These individuals, operating from China and Russia, used fake documents to secure remote work contracts and receive payment primarily in stablecoins like USDC and USDT.
"While these North Korean individuals sought to launder these illicit proceeds, the U.S. government has promptly blocked and seized over 7.74 million USD related to this plan," the DOJ stated in its press release.
Sophisticated Money Laundering Tactics via Blockchain
The DOJ investigation revealed that these IT personnel deployed multiple complex methods to conceal the origin and destination of digital assets. They used virtual identities on online platforms, performed Shard transactions to avoid detection, and exploited cross-chain transfers along with Token Swap to blur transaction traces.
Notably, the group also purchased Non-Fungible Tokens as a creative money laundering method and used online accounts located in the U.S. to increase the legitimacy of their activities. Ultimately, the funds were transferred back to North Korea through channels involving Sim Hyon Sop – a North Korean Foreign Trade Bank official, and Kim Sang Man – the executive director of the Chinyong organization associated with the North Korean Ministry of Defense.
Matthew R. Galeotti, head of the DOJ's Criminal Block, emphasized: "This forfeiture action once again demonstrates how the North Korean government exploits the cryptocurrency ecosystem to fund illegal priorities."
Sue J. Bai, head of the DOJ's National Security Block, added that for years, North Korea has exploited remote IT contracts and the global crypto ecosystem to avoid U.S. sanctions and fund weapons programs. "Today's seizure of millions of dollars reflects our strategic focus on disrupting these illegal revenue generation plans," she affirmed.
