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06/06/2025

US Moves to Seize $7.74 Million in Crypto Tied to North Korean IT Workers' Money Laundering Scheme

Washington, D.C. – The U.S. Department of Justice (DOJ) has filed a civil forfeiture complaint seeking to seize more than $7.74 million in cryptocurrency and other digital assets, alleging they are proceeds of a money laundering conspiracy involving North Korean IT workers operating under false identities. According to a statement dated June 5, 2025, the assets were frozen in April 2023 and are connected to an indictment against Sim Hyon Sop, a China-based banker accused of facilitating money laundering on behalf of the North Korean regime.

US Moves to Seize $7.74 Million in Crypto Tied to North Korean IT Workers' Money Laundering Scheme

Washington, D.C. – The U.S. Department of Justice (DOJ) has filed a civil forfeiture complaint seeking to seize more than $7.74 million in cryptocurrency and other digital assets, alleging they are proceeds of a money laundering conspiracy involving North Korean IT workers operating under false identities.

According to a statement dated June 5, 2025, the assets were frozen in April 2023 and are connected to an indictment against Sim Hyon Sop, a China-based banker accused of facilitating money laundering on behalf of the North Korean regime.

Fake Identities and "Remote Work" in the Blockchain Industry

The DOJ says North Korean developers used fraudulent documents and other concealment tactics to obtain remote jobs at blockchain companies across multiple countries. After receiving payment in stablecoins such as USDT and USDC, they conducted sophisticated laundering operations including chain hopping, conversion to NFTs, and use of Ethereum Name Service (ENS) domains to obscure the origin of the funds.

The money was then allegedly funneled back to Pyongyang through intermediaries such as Sim Hyon Sop and Kim Sang Man — the latter previously sanctioned by the Office of Foreign Assets Control (OFAC) for money laundering activities.

The Shadow War Between Washington and Pyongyang on the Web3 Front

Matthew Galeotti, head of the DOJ's Criminal Division, stated:

"We will use every legal tool available to protect the cryptocurrency ecosystem and prevent North Korea from profiting illegally through sanctions evasion."

North Korea has been ramping up its infiltration of the crypto space to generate revenue for the regime. According to a report by the Google Threat Intelligence Group, Pyongyang has recently expanded its targeting to blockchain companies outside the United States — particularly in Europe — following increased scrutiny from U.S. authorities.

Additionally, prominent blockchain investigator ZachXBT revealed in August 2024 that he had uncovered a network of North Korean developers earning as much as $500,000 per month from major crypto projects through freelance work.

A Global Warning

Back in 2022, the DOJ, the State Department, and the Treasury Department jointly issued an advisory warning about the rapid growth of North Korea's tech workforce taking on freelance jobs — particularly in the blockchain and crypto space.

Conclusion

This case is yet another reminder that cryptocurrency is not a lawless frontier, and that international law enforcement agencies are increasingly taking aggressive action to stop the exploitation of Web3 for illicit purposes. As state-sponsored hacker groups and IT operatives — like those from North Korea — grow more sophisticated, blockchain transparency and digital identity verification will remain major challenges in the years ahead.