Two Chinese Nationals Indicted for Laundering North Korean Stolen Cryptocurrency Funds
Two Chinese nationals, Tian Yinyin and Li Jiadong, have been indicted by the US government for their alleged involvement in laundering over $100 million in cryptocurrency funds stolen by North Korean hackers. The charges brought against them include money laundering conspiracy and operating an unlicensed money transmitting business.
Accusations and Timeline of Events
Between December 2017 and April 2019, Tian and Li are accused of laundering virtual currency stolen from exchanges and other sources by North Korea’s state-backed Lazarus Group. One of the prominent hacks attributed to them was a $250 million heist at an undisclosed exchange in 2018, followed by the theft of $48.5 million in virtual currency from a South Korean exchange in November 2019.
In the $250 million theft case, Tian reportedly transferred $34 million of the $91 million received to a Chinese bank account and converted $1.4 million into iTunes gift cards. The US Treasury alleges that their North Korean associates circumvented virtual currency exchange KYC controls by submitting altered photographs and identification documents. In total, 113 virtual currency accounts and addresses were purportedly used in the money laundering scheme.
Sanctions Imposed
Although Tian and Li are unlikely to stand trial in the US, the Treasury has imposed sanctions on them. This means that any of their assets or interests within US jurisdiction or under the control of US individuals must be frozen and reported to the Office of Foreign Assets Control.
North Korea’s Cryptocurrency Activities
North Korea has been known to target cryptocurrency exchanges as a means of evading US sanctions and generating revenue for the regime led by Kim Jong-un. A UN report from 2019 revealed that state-backed hackers have amassed up to $2 billion by utilizing malware to target both cryptocurrency exchanges and traditional banks.
This latest indictment and sanctions serve as a stark reminder of the ongoing cybersecurity threats posed by state-sponsored hacking groups and the importance of robust security measures within the cryptocurrency industry.