The U.S. Department of Justice is aiming to seize $7.74 million in cryptocurrency involving North Korean IT workers who are believed to be using fake identities to secure remote jobs with blockchain companies.
According to the DOJ, these funds were initially frozen back in April 2023 as part of an indictment against Sim Hyon Sop, a banker allegedly supporting these North Korean IT professionals from China.
The federal agency is looking to confiscate several cryptocurrencies, including Stablecoins and Bitcoins, in different amounts. There are also Ethereum name service domains involved, all held in a Washington, DC federal court based on a citizen’s forfeiture complaint filed on June 5.
Matthew Galeotti, the director of criminal investigations at the Justice Department, emphasized that the case illustrates how the North Korean government is trying to exploit the cryptocurrency ecosystem to fund illegal activities. He also mentioned that the department is committed to utilizing all legal tools available to protect the cryptocurrency sector and prevent North Korea from violating U.S. sanctions.
The DOJ has accused these North Korean IT workers of operating in various countries, utilizing false identification and other tactics to get hired.
It’s been reported that these workers would exchange their earnings in stablecoins like USDC or Tether (USDT) and then employ laundering techniques, such as transferring through NFTs and switching tokens, to obscure the sources of their funds.
Furthermore, the Justice Department indicated that another North Korean entity, which had funds approved by OFAC due to money laundering issues, is now to be redirected back to the North Korean government via SIM and Kim Sang Man.
In recent years, North Korea has been increasingly attempting to infiltrate the cryptocurrency sector to generate funds for the isolated regime. An April report from Google’s Threat Intelligence Group highlighted that North Korea is extending its outreach to companies outside the U.S. due to increased scrutiny from European authorities.
On another note, blockchain investigator ZachxBT revealed last August that a complex network of North Korean developers was potentially generating up to $500,000 monthly from established cryptocurrency projects.
In 2022, the DOJ, alongside the State Department and the Treasury, issued a joint advisory warning about the surge of North Korean workers entering various freelance tech roles, especially in encryption.
