The United States Department of Treasury has announced sanctions against three individuals allegedly connected to the notorious Lazarus Group, a hacking organization based in North Korea. The group is accused of being responsible for cyber-attacks targeting the cryptocurrency industry, with thefts worth over $1.7 billion reported in 2022.
The individuals targeted by the US Treasury sanctions are accused of assisting Lazarus Group in converting stolen cryptocurrency into fiat currency, which was allegedly used to fund North Korea’s illicit weapons of mass destruction and ballistic missile programs. The sanctioned individuals are Wu Hiuhui and Cheng Hung Man, both based in China and Sim Hyon Sop, who recently relocated to China and worked for the Korea Kwangson Banking Corp.
OTC Traders and Bank Officials Accused of Facilitating Money Laundering
According to the US Treasury, Wu and Cheng facilitated the conversion of millions of dollars worth of stolen crypto into fiat currency for Lazarus Group in 2021. Sim is accused of coordinating millions of dollars in financial transfers for North Korea, using networks of over-the-counter traders to avoid detection by financial institutions.
The Treasury Department alleges that the sanctioned individuals used front companies to purchase goods, including tobacco and communication devices, on behalf of North Korea, in exchange for the stolen cryptocurrency.
Sanctions Designed to Prevent North Korea’s Access to the International Financial System
The US Treasury sanctions target properties belonging to the three individuals, and foreign institutions or individuals who have conducted transactions with them could also risk being sanctioned. The US Treasury’s Under Secretary for Terrorism and Financial Intelligence, Brian E. Nelson, stated that North Korea’s use of illicit facilitation networks to access the international financial system and generate revenue using virtual currency for the regime’s unlawful weapons of mass destruction and ballistic missile programs directly threatens international security.
The US Treasury announcement also noted that Lazarus Group is controlled by North Korea’s Reconnaissance General Bureau, the country’s primary intelligence organization. The hacker group has been linked to several high-profile cyber-attacks in the cryptocurrency industry, including the Ronin Network hack, which resulted in the loss of $620 million.