The U.S. Department of the Treasury, in cooperation with the UAE, has announced sanctions against individuals and companies involved in laundering funds for DPRK through cryptocurrency and IT workers.
Reasons for Sanctions
Sanctions were imposed on Lu Huaying and Zhang Jian from the UAE, and an entity involved in laundering funds for the Democratic People's Republic of Korea (DPRK). Using a UAE-based front company, they facilitated money laundering and cryptocurrency services to transfer illicit proceeds to Pyongyang. The network is managed by Sim Hyon Sop, operating on behalf of DPRK from China.
Role of Cryptocurrencies in DPRK Operations
DPRK extensively uses proxies and agents to access international financial systems, including IT work, digital asset theft, and money laundering, to finance its WMD programs. Sim Hyon Sop, a representative of DPRK's Korea Kwangson Banking Corp, participates in money laundering schemes using cryptocurrencies. Until September 2023, Lu Huaying converted cryptocurrency into fiat currency for Sim Hyon Sop, and Zhang Jian facilitated currency exchange and courier services.
Consequences of Sanctions
Sanctions result in the blocking of all assets in the U.S. belonging to sanctioned individuals and entities, prohibiting any financial transactions with them. Violations may lead to additional sanctions. OFAC also prohibits non-U.S. persons from involving U.S. persons in sanction violations or circumventing them.
The sanctions by the US and UAE aim to disrupt DPRK's financial operations supporting its illicit programs, highlighting the need for international cooperation to combat unlawful activities.
