US Seeks to Seize $7.7M in Crypto Allegedly Laundered by North Korean IT Workers

The U.S. Department of Justice (DOJ) has filed a civil forfeiture action aiming to seize around $7.74 million in cryptocurrency and NFTs linked to a scheme involving North Korean IT professionals. These individuals are accused of obtaining remote jobs at blockchain and tech firms under false identities, generating illicit earnings that were later laundered.

According to a DOJ statement released on June 5, the funds were initially frozen in April 2023 during an indictment targeting Sim Hyon Sop, a China-based banker alleged to be central to laundering activities for North Korean operatives. The civil complaint, filed in a Washington, D.C. federal court, lists various digital assets, including Bitcoin, stablecoins like USDC and USDT, Ethereum Name Service (ENS) domains, and NFTs, spread across self-custody wallets and Binance accounts.

Matthew Galeotti, head of the DOJ’s criminal division, emphasized the case as an example of how North Korea is attempting to exploit cryptocurrency systems to bankroll its sanctioned operations. He affirmed the department’s commitment to using every available legal avenue to disrupt these financial networks.

The IT workers reportedly operated from multiple countries and used fake IDs and other deception tactics to land jobs in the global crypto space. Once paid—often in stablecoins—they allegedly engaged in chain hopping and token swaps, converting funds to NFTs and moving them across blockchains to mask their origin.

The DOJ further alleges the proceeds were intended to be funneled back to the North Korean regime through individuals like Sim and Kim Sang Man, both of whom are under U.S. sanctions for money laundering.

North Korea has increasingly turned to the crypto sector to evade sanctions and generate revenue. Google’s Threat Intelligence Group noted in an April report that North Korean agents have expanded operations to blockchain companies outside the U.S., particularly in Europe, as global scrutiny has tightened.

Blockchain analyst ZachXBT previously reported uncovering a complex network of North Korean developers earning up to $500,000 monthly through work with established crypto projects.

In response to these growing threats, the DOJ, State Department, and Treasury Department issued a joint advisory in 2022 warning about the infiltration of North Korean workers into freelance tech roles, particularly within the cryptocurrency industry.