US Treasury takes action against three individuals linked to the North Korean Lazarus Group.
Over-the-counter (OTC) cryptocurrency traders aiding North Korea's Lazarus Group in converting stolen crypto into cash have been sanctioned by the United States Treasury Department.
Chinese and Hong Kong traders found themselves on the receiving end of the Treasury's Office of Foreign Assets Control (OFAC) sanctions. A China-based banker was also sanctioned for their role in orchestrating the illegal money flow.
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According to the US Department of Treasury press release shared on April 24th, several entities helped North Korean hackers through "illicit financing and malicious cyber activity."
Regarding the matter, US Treasury Secretary for Terrorism and Financial Intelligence Brian E. Nelson noted:
The DPRK’s <Democratic People's Republic of Korea's> use of illicit facilitation networks to access the international financial system and generate revenue using virtual currency for the regime’s unlawful weapons of mass destruction(WMD) and ballistic missile programs directly threatens international security.
Wu Huihui, a Chinese national, has been sanctioned by the OFAC for "providing material support to the Lazarus Group," a notorious North Korean hacker group responsible for some of the largest crypto heists.
The Treasury Department claims that Wu converted millions of dollars in cryptocurrencies into fiat for North Korean "cyber actors" through multiple transactions in 2021.
While the Chinese government has imposed strict restrictions on cryptocurrency operations, OTC transactions continue to happen. In its statement, the Treasury Department explained:
DPRK actors frequently utilize networks of OTC traders, including those based in the People's Republic of China (PRC), to carry out transactions on their behalf in order to evade detection by financial institutions or competent authorities.
Cheng Hung Man, a British national residing in Hong Kong, was also sanctioned for providing material support to Wu. Cheng allegedly helped Wu gain access to the US financial system by using front companies to fly under the radar.
North Korean national Sim Hyon Sop, who is a representative of the Korea Kwangson Banking Corporation, was also sanctioned. In its document, OFAC alleges that Sop helped coordinate illegal transfers.
In February, South Korea made a similar move by sanctioning several individuals and businesses tied to North Korea-initiated cyberattacks and cryptocurrency thefts.
