Treasury Department Disrupts North Korean Crypto Money Laundering Operation Using UAE-Based Shell Company
The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) says it is dismantling North Korea’s digital asset money laundering network by taking action against individuals and entities involved in the operation.
In a statement, the OFAC says it is sanctioning Chinese nationals Lu Huaying and Zhang Jian who worked for the network that used a front company in the United Arab Emirates (UAE) to launder illicit money and convert crypto funds for North Korea.
The OFAC says the Hermit Kingdom is using agents and proxies to access the international financial system and engage in illicit revenue generation schemes such as conducting fraudulent IT work and stealing digital assets.
The agency says representatives set up shell companies and manage 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 Acting Under Secretary of the Treasury for Terrorism and Financial Intelligence Bradley T. Smith,
“As the DPRK continues to use complex criminal schemes to fund its WMD and ballistic missile programs—including through the exploitation of digital assets—Treasury remains focused on disrupting the networks that facilitate this flow of funds to the regime.”
The OFAC says Lu cashed out crypto from North Korea’s revenue-generation projects into fiat on behalf of the OFAC-sanctioned Sim Hyon Sop, who leads the laundering network.
Zhang helped facilitate the exchange of fiat currency and served as a courier for Sim.
The OFAC is also sanctioning Green Alpine Trading, the UAE-based shell company used by the laundering network.
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