Feds Move to Confiscate $7.7M in Crypto Tied to Alleged North Korean IT Scam Operation

Another day, another crypto seizure—this time with a geopolitical twist. The US government just flexed its regulatory muscles, targeting millions in digital assets allegedly funneled by North Korean IT workers running a global fraud ring. Because nothing says 'international cooperation' like freezing wallets.

The Irony of Decentralized Finance

Blockchain's transparency strikes again: authorities traced the funds through immutable ledgers—the same feature crypto enthusiasts cheer when it's not exposing their illicit side hustles. The $7.7M haul? Chump change compared to Pyongyang's missile budget, but hey—every sanctioned dollar counts.

Wall Street Won't Like This Part

While TradFi brokers were busy shorting Bitcoin ETFs, North Korea was allegedly gaming the system with fake IT consultancies. Maybe banks should take notes—these guys turned crypto laundering into an art form without a single overdraft fee.

DOJ Targets North Korea Digital Laundering Network

Authorities said the operation aimed to bypass U.S sanctions. It also sought to generate revenue for North Korea’s weapons program.

The scheme was linked to Sim Hyon Sop, a representative of North Korea’s Foreign Trade Bank. He was previously indicted in April 2023 for his role in similar activities.

Department Files Civil Forfeiture Complaint Against Over $7.74M Laundered on Behalf of the North Korean Government

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Sim allegedly collaborated with Kim Sang Man, who serves as CEO of Chinyong. Chinyong is a state-linked IT firm operating under North Korea’s Ministry of Defense.

To conceal the funds, the workers used several tactics. They allegedly opened fake accounts, split transactions into smaller amount and used token-swapping techniques. In addition, they purchased NFTs as a store of value.

According to the Justice Department, the funds moved through a web of platforms and intermediaries. Eventually, the money was routed back to the North Korean government.

“This forfeiture action highlights, once again, the North Korean government’s exploitation of the cryptocurrency ecosystem to fund its illicit priorities,” said Matthew Galeotti, head of the DOJ’s Criminal Division. He added that the department would continue using legal tools to disrupt financial lifelines supporting the regime.

FBI Warns of North Korean IT Fraud Using Stolen American Identities

Officials from the FBI said the investigation uncovered a widespread effort to defraud US businesses by hiring North Korean workers posing as remote freelancers using stolen American identities.

Assistant director Roman Rozhavsky called it a sophisticated threat and urged companies to closely examine their remote hiring practices.

Thursday’s complaint is part of a wider enforcement campaign that began in 2024 under the Department’s DPRK RevGen initiative. This effort has focused on both North Korean operatives and the US-based enablers who support them.

So far, authorities have taken action against domestic facilitators, crypto traders, and schemes involving data theft by North Korean IT workers.

The FBI’s VIRTUAL Assets Unit and its Chicago Field Office led the investigation. They were supported by cybercrime prosecutors and national security attorneys.

According to officials, the operation reflects an ongoing strategy to cut North Korea off from the global financial system. Moreover, it aims to stop the regime from using cryptocurrency to evade US sanctions.