The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) says it is dismantling North Korea’s digital asset laundering network by taking action against individuals and entities involved in the operation.
In a statement, OFAC said it is punishing Chinese nationals Lu Huaying and Zhang Jian, who worked for the network that used a front company in the United Arab Emirates (UAE) to illegally launder money and convert cryptocurrency for North Korea .
OFAC says the Hermit Kingdom uses agents and proxies to access the international financial system and engage in illegal revenue-generating schemes, such as conducting fraudulent IT work and stealing digital assets.
The agency says representatives have set up shell companies and run bank accounts to move and disguise funds that will be used to finance North Korea’s unlawful weapons of mass destruction (WMD) and ballistic missile programs.
Says Treasury Department Acting Under Secretary for Terrorism and Financial Intelligence Bradley T. Smith:
“As the DPRK continues to use complex criminal schemes to finance its weapons of mass destruction and ballistic missile programs – including through the exploitation of digital assets – the Treasury Department remains focused on disrupting the networks that facilitate this flow of money to the regime.”
OFAC says Lu converted crypto from North Korea’s revenue-generating projects into fiat on behalf of OFAC-sanctioned Sim Hyon Sop, who runs the money laundering network.
Zhang helped facilitate the exchange of fiat money and served as a courier for Sim.
OFAC also imposed sanctions on Green Alpine Trading, the UAE-based shell company used by the money laundering network.
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