Global: US Treasury and UAE Sanction North Korean Digital Asset Laundering Network

The United States Treasury Department, in collaboration with the United Arab Emirates (UAE), has imposed sanctions on two Chinese citizens and a UAE-based trading company for their alleged involvement in laundering digital assets for North Korea.

Breaking Down the Network

The Treasury’s Office of Foreign Assets Control (OFAC) announced sanctions targeting Chinese nationals Lu Huaying and Zhang Jian, as well as UAE-based Green Alpine Trading. These entities are accused of facilitating cryptocurrency conversions and laundering funds that were ultimately funneled to the Democratic People’s Republic of Korea (DPRK).

Bradley T. Smith, Acting Treasury Under Secretary for Terrorism and Financial Intelligence, emphasized the importance of these actions:

“As the DPRK continues to use complex criminal schemes to fund its WMD [weapons of mass destruction] and ballistic missile programs — including through the exploitation of digital assets — Treasury remains focused on disrupting the networks that facilitate this flow of funds to the regime.”

Lu and Zhang, who reside in the UAE, reportedly played central roles in these operations. Lu allegedly converted cryptocurrency into fiat currency, which was then used to procure goods and services destined for North Korea or its proxies between early 2022 and September 2023. Zhang is believed to have engaged in similar activities and may have acted as a courier for Sim Hyon Sop, a sanctioned executive of Korea Kwangson Banking Corporation in China.

Sim, previously sanctioned in April 2023, faces allegations of orchestrating money laundering schemes and collaborating with North Korean IT workers to generate illicit income in the United States.

The UAE-based Green Alpine Trading company is suspected of being a front for laundering funds that supported Sim’s activities. The company’s website has since been suspended.

North Korea’s Resourceful Adversaries

According to TRM Labs, North Korea-linked groups stole an estimated $600 million to $700 million in cryptocurrency in 2023 alone. Between 2017 and 2023, these groups allegedly pilfered $3 billion worth of digital assets through various tactics.

The techniques attributed to North Korean operatives include:

• Impersonation: Posing as authorized employees.
• Hacking: Targeting cryptocurrency exchanges.
• Malware Deployment: Embedding malicious software into operating systems.
• Crypto Mixers: Obscuring the trail of illicit funds.

A Continued Battle

These sanctions represent a concerted effort by the US and UAE to dismantle financial networks supporting North Korea’s weapons programs. As digital asset-related crimes evolve, authorities remain vigilant in countering these sophisticated schemes.