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Hongji Feng
Author
Hongji Feng
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The US Treasury’s Office of Foreign Assets Control has announced sanctions against eight individuals and two entities in North Korea connected to the laundering of the proceeds of the cyber activity and the schemes of the computer workers.
The action was detailed in a Release of the treasury published on November 4 and targeted channels that moved stolen digital assets and contract proceeds through dollar binaries, increasing the compliance risk for exchanges, brokers, custodians and wallet providers that could touch those funds.
The release links the activities to weapons programs and cites a recent multilateral monitoring report on sanctions evasion through cyber robo and information technology contracts. The update also puts new data on the record for screening, including cryptocurrency addresses linked to a previously designated bank.
Who was designated and how did the networks operate
OFAC has designated North Korean bankers Jang Kuk Chol and Ho Jong Son for handling funds on behalf of First Credit Bank, including $5.3 million in cryptocurrency.
Korea Mangyongdae Computer Technology Company was designated to operate delegations of computer workers in China who used proxies to move funds, and U Yong Su was designated to act on behalf of the company.
Ryujong Credit Bank was designated for carrying out financial services that supported the avoidance of sanctions between China and North Korea, including remittances, laundering, and transactions for foreign workers.
Additional designations covered representatives of DPRK financial institutions located in China and Russia, with the Treasury describing transfers in US dollars, Chinese yuan and euros, as well as roles related to previously sanctioned banks and front companies.
The release cites more than $3 billion stolen in three years, mainly in cryptocurrencies, linking cyber theft and information technology income to the same funding channels.
“North Korean state-sponsored hackers steal and launder money to fund the regime’s nuclear weapons program,” said John K. Hurley, Under Secretary of the Treasury for Terrorism and Financial Intelligence.
“By generating revenue for Pyongyang’s weapons development, these actors directly threaten the security of the United States and the world. Treasury will continue to pursue the enablers and facilitators behind these schemes to cut off the DPRK’s illicit revenue streams,” he said.
What comes after the new sanctions on North Korea
Under the measures, the ownership and interests in the property of parties designated in the United States or controlled by US persons are blocked, and entities owned fifty percent or more by blocked persons are also blocked.
Transactions involving such properties are generally prohibited unless they are authorized or exempted, which places the burden on crypto companies to confirm counterparties and stop flows that touch listed names or related addresses.
The Treasury warned that financial institutions and other persons engaged with designated parties could face sanctions or enforcement.
The agency also reiterated that removal from the list is possible under established procedures, which preserves a formal pathway for petitions while the current restrictions remain in effect.
