WASHINGTON — The Justice Department said Monday it had indicted four men on charges of laundering virtual currency stolen by a notorious North Korean online criminal syndicate as part of a far-reaching plan to buy goods with US dollars and international sanctions to bypass.
The charges, filed in three cases in federal court in Washington, outline a complex multi-year attempt to launder cryptocurrency obtained by the Lazarus Group, an organization linked to espionage, online theft and cyber-attacks, including the Sony breach. Pictures in 2014.
The settlement involved a relatively modest amount of currency. But it represents only a fraction of the illegal activities being undertaken by North Korea, officials said — and it vividly showed the creativity and determination of an isolated country that intends to defy demands that it must expand its nuclear weapons and long-range missile programs. to report.
In the first indictment, the government charged a China-based banker, Sim Hyon Sop, 39, along with three cryptocurrency traders with conspiracy to convert virtual currency stolen from accounts into dollars. The government of North Korea was short of cash and later used the money to buy goods, including tobacco and communications equipment, in 2018.
The second indictment outlined a related conspiracy by Mr Sim and several North Korean information technology workers who used fake identities to get jobs at blockchain companies in the United States. Several employees, and others not named in the court documents, used that access to launder about $12 million that passed through Mr. Sim’s cryptocurrency wallet, prosecutors said.
A third indictment describes an unlicensed money transfer company that conducted more than 1,500 transactions for U.S. customers without the necessary licenses.
Three of the accused, including Mr Sim, were in China and Hong Kong when they committed their crimes, according to prosecutors, while a fourth was identified only by an online alias. None of them are currently in US custody, and a Justice Department spokesman declined to say whether the Biden administration will seek their extradition.
The allegations stemmed from “innovative efforts” by North Korean operatives to evade sanctions by “targeting virtual currency companies for theft,” said Assistant Attorney General Kenneth A. Polite Jr., the chief of the department’s criminal justice division. of Justice, in a statement.
In a related action, the Ministry of Finance imposed sanctions on Mr Sim and the two men named by the Ministry of Justice, Wu HuiHui and Cheng Hung Man. Brian E. Nelson, the secretary of state for terrorism and financial intelligence, said North Korea’s efforts to generate revenue using stolen virtual currencies “pose a direct threat to international security” and destabilize the international financial system.
Since 2017, North Korea has stolen a huge amount of currency through fraud and by hacking into virtual currency accounts. Agents working on behalf of the country’s intelligence services and military stole about $1.7 billion worth of cryptocurrency in 2022 alone, according to the Treasury Department.
North Korea employs an extensive network of currency dealers, many of whom operate out of China, intended to convert stolen virtual currencies into so-called fiat currencies, such as dollars and euros. That money, in turn, is used to buy much-needed goods for the government, military and leadership, researchers said.
In recent years, North Koreans in the country have applied for remote development jobs without disclosing their identities and by misrepresenting their location, allowing them to evade security checks.
At the center of all these efforts is the Lazarus Group, which is under the direct control of North Korea’s main intelligence agency.
The group has targeted the international financial, shipping, media and entertainment sectors to extract currency and create disruption through data theft, malware heists and destructive malware operations. According to U.S. officials, in March 2022, the Lazarus Group committed one of the largest virtual currency heists to date, stealing nearly $620 million worth of virtual currency from a blockchain project linked to an online game.