The U.S. Treasury’s Office of Foreign Assets Control (OFAC) and the UAE government have cracked down on a North Korean crypto asset laundering network. This joint effort targets individuals and a UAE-based company accused of laundering millions to support North Korea’s weapons programs.
OFAC sanctioned Lu Huaying and Zhang Jian, both based in the UAE, for their roles in aiding North Korea. The pair used Green Alpine Trading LLC, a UAE front company, to launder funds through cryptocurrency and other means. The operation funneled illicit proceeds to Pyongyang, benefiting the regime’s weapons of mass destruction (WMD) and missile projects.
Lu laundered the cryptocurrency into cash, while Sim Hyon Sop was a China-based agent in charge of the illicit finances of the DPRK. Zhang, who had connections to the network, worked as a courier and took care of fiat exchanges. Both Lu and Zhang reported to Sim, already sanctioned for arranging money laundering to fund the military activities of the DPRK.
Sim Hyon Sop’s role in North Korean crypto operations
Sim, tied to Korea Kwangson Banking Corp (KKBC), a DPRK state-run entity, manages large-scale operations to move funds internationally. These activities often involve creating shell companies and leveraging digital assets to disguise money trails.
The UAE’s collaboration underscores its commitment to countering financial crimes tied to global security threats. Bradley T. Smith, Acting Under Secretary for Terrorism and Financial Intelligence, emphasized the joint resolve to dismantle networks enabling North Korea’s destabilizing programs.
The sanctions freeze all US-linked assets of those designated, including entities indirectly owned by them. US persons and institutions are barred from transactions involving the sanctioned parties. Violators risk severe penalties.
Nevertheless, OFAC showed that it was very willing to implement sanctions, as well as to remove entities from the lists in cases of total compliance. It has reaffirmed that sanctions are targeted at eliciting modifications in behavior and not punishment.
