The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has sanctioned two individuals and one entity linked to a money laundering network funneling millions of dollars in illicit funds to the North Korean regime.
The network, based in the United Arab Emirates (UAE), laundered proceeds from cybercrime and fraudulent IT work to finance North Korea’s weapons of mass destruction (WMD) and ballistic missile programs.
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The sanctions, announced on Tuesday, reflect ongoing efforts to disrupt North Korea’s financial operations and were carried out in close cooperation with the UAE government.
Key Players and Actions
The targeted individuals—Lu Huaying and Zhang Jian, both Chinese nationals—and a UAE-based front company, Green Alpine Trading, LLC, were identified as key facilitators in the laundering scheme. These operatives worked under the direction of Sim Hyon Sop, a PRC-based representative of North Korea’s Korea Kwangson Banking Corporation (KKBC), which has been previously sanctioned by OFAC.
Lu Huaying: Between early 2022 and September 2023, Lu laundered millions of dollars in cryptocurrency derived from North Korea’s illicit revenue streams. She converted the digital assets into fiat currency through cash-outs and money mules, ultimately channeling funds for North Korean use.
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Zhang Jian: Zhang provided additional financial exchange services for Sim and reportedly acted as a courier for the network.
Green Alpine Trading, LLC: This UAE-based front company served as a critical hub for money laundering operations, facilitating the movement and concealment of illicit funds.
The scheme involved obfuscated revenue from North Korean IT workers and cyberattacks, which was funneled back to Pyongyang to support its military ambitions.
The Treasury emphasized that these actions are part of a broader effort to disrupt North Korea’s financing of its destabilizing activities, including its partnership with Russia and increasing cyber operations targeting critical infrastructure worldwide.
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“The DPRK continues to exploit digital assets to fund its unlawful WMD and ballistic missile programs,” said Acting Under Secretary of the Treasury for Terrorism and Financial Intelligence, Bradley T. Smith. “The United States, in collaboration with international partners like the UAE, is committed to disrupting these networks and holding enablers accountable.”
As a result of the designations:
- All U.S.-based property and assets belonging to the sanctioned individuals and entity are blocked.
- U.S. persons are prohibited from engaging in transactions with the designated individuals or the entity.
- Entities with 50% or greater ownership by blocked persons are also subject to sanctions.
OFAC warned that financial institutions or individuals facilitating transactions with the sanctioned parties may face enforcement actions or secondary sanctions. Non-U.S. entities are also prohibited from indirectly causing U.S. sanctions violations.
The Treasury underscored that the goal of these sanctions is not punishment but to prompt behavioral change. Detailed information on the sanctioned individuals and entity can be found on the OFAC website.
The DPRK’s use of sophisticated money laundering networks, often involving cryptocurrency, has become a critical funding stream for its weapons programs. These schemes typically rely on global financial intermediaries, front companies, and cyber operations to evade international sanctions.
This latest action highlights the growing collaboration between the United States and international partners to counter North Korea’s illicit financial operations and reinforce the integrity of global financial systems.
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