UN accuses North Korea of crypto money laundering racket

North Korea has deployed new tactics in its latest attempts to evade sanctions using cryptocurrency and blockchain technology, according to reports this morning from South Korean news outlet Chosun.

An investigation currently underway by the UN Security Council’s Sanctions Committee on North Korea has uncovered a sophisticated plot by North Korean actors to siphon cryptocurrency using a Hong Kong-based company.

The company, which uses a blockchain technology platform, was purposefully established in Hong Kong in April 2019. Allegedly, Mr Julian Kim, also known through his alias Tony Walker, established the shipping and logistics company on behalf of North Korea.

Called ‘Marine China’, it’s suspected that the business was never intended to be legitimate. Instead, Kim appointed a second person as acting head of the company while he retained sole proprietorship of the business.

North Korean actors were allegedly using the firm to launder cryptocurrency, presumably under the guise that it was used to power the platform on which the company operated. Instead, the investigation revealed Kim had tried to withdraw funds on several occasions from banks in Singapore and transfer the cash to North Korea.

It’s unclear at this time how many of Mr Kim’s withdrawals were successful. The UN committee stated that cryptocurrency stolen or laundered by North Korean agents is exchanged for cash using multiple transactions, which makes it incredibly difficult to trace the source of the funds.

Cryptocurrency hackers ‘trained from childhood’

The news follows allegations that North Korea’s intelligence agency has been grooming cyber-hackers since childhood to train them in siphoning off cryptocurrency funds. Whilst much is unknown about the insular state’s cyber practices, this scheme is the latest in a long history of cryptocurrency manipulation.

Coin Rivet reported in August on the UN’s claims that North Korea was involved in the theft of several billion dollars worth of cryptocurrency, perpetrated through cyberattacks on Russian cryptocurrency exchanges and digital asset banks.

Pyongyang denies having any involvement in cryptocurrency theft or money laundering activities using digital currencies, comparing such accusations to “Nazi propaganda” designed to tarnish North Korea’s image.

Numerous sanctions have been imposed against North Korea for alleged human rights abuses and Pyongyang’s increasing focus on nuclear weapons technology.

The sanctions are thought to be directly responsible for North Korea’s large-scale foray into cryptocurrency theft, which has seen the secretive Asian state become “an extremely dangerous cyber power” in recent years.