The United States Department of Justice (DOJ) has filed a civil forfeiture complaint seeking to seize approximately $7.74 million in cryptocurrency allegedly connected to a scheme involving North Korean IT workers.
These individuals, operating on behalf of the North Korean government, reportedly used the crypto ecosystem to evade US sanctions and funnel illicit gains back to the Democratic People’s Republic of Korea (DPRK).
The frozen funds are tied to an ongoing investigation that began with an indictment in April 2023 against Sim Hyon Sop, a China-based representative of North Korea’s Foreign Trade Bank.
These workers allegedly bypassed know-your-customer (KYC) and due diligence procedures by using stolen or forged documents to disguise their identities and locations. Their work, often compensated in stablecoins such as USDC or USDT, generated income that was eventually laundered and routed back to North Korea.
The proceeds were reportedly moved through online US.-based platforms and commingled to avoid detection, before being transmitted to North Korean entities through intermediaries such as Sim and Kim Sang Man.
Kim Sang Man, named in the DOJ filing, is alleged to be the CEO of Chinyong (also known as Jinyong IT Cooperation Company), which operates under North Korea’s Ministry of Defense.
Kim’s role allegedly involved transmitting funds from the IT workers to Sim, thereby completing the cycle of crypto laundering back to the North Korean government.
US businesses were also advised to review remote hiring practices to detect potential obfuscation tactics that may be used by foreign actors.
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