As Bitcoin prices faced a decline amid falling US markets, dropping to $100,800, investors remain concerned about potential further dips as Northern Korea-related sanctions by the US emerge. With the cryptocurrency market on edge, many anticipate significant developments impacting market trajectories and global financial stability.
US Crypto Sanctions
Despite previous efforts to embrace cryptocurrencies, the US continues to combat crime associated with digital assets. North Korean cybercriminals are believed to be behind several major crypto hacks, funneling billions to support nuclear development programs in their country. The US Treasury Department’s Office of Foreign Assets Control (OFAC) has taken a firm stand, imposing sanctions on eight individuals and two entities linked to these activities.
“State-supported hackers in North Korea are stealing and laundering money to fund the regime’s nuclear weapons program. By providing revenue to Pyongyang’s weapons development program, these actors pose a direct threat to US and global security. The US Treasury will track facilitators and supporters behind these schemes to cut off North Korea’s illicit income sources.” – Assistant Secretary of Treasury for Terrorist Financing and Financial Crimes, John K. Hurley
North Korea and Cryptocurrency
Two bankers, Jang Kuk Chol and Ho Jong Son, are named in the recent sanctions announcement. Designated by OFAC, these individuals managed funds including $5.3 million in cryptocurrency on behalf of the First Credit Bank. The Korea Mangyongdae Computer Technology Company (KMCTC), a North Korean IT firm, is implicated in using Chinese proxies for banking operations.
North Korean IT companies are reportedly engaged in scams and hacking efforts to seize funds, channeling them to North Korea through various means. Major crypto hacks and massive organized cyber fraud schemes are attributed to North Korean hackers, enjoying a privileged life compared to ordinary North Korean citizens, all under state support.
The US Treasury elaborates further in its official announcement:
“Ryujong Credit Bank, a North Korean financial institution, provides financial support for sanctions-evading activities between China and North Korea. These include remittances of North Korea’s foreign currency earnings, money laundering, and financial transactions for North Korean workers abroad. Today, OFAC has listed Ryujong Credit Bank under E.O. 13810 for its involvement in the financial services sector in North Korea.
Ho Yong Chol, alongside Han Hong Gil, Jong Sung Hyok, Choe Chun Pom, and Ri Jin Hyok, are identified as representatives of North Korean financial institutions based in China or Russia. Ho facilitated US and Chinese currency transfers totaling $2.5 million for Korea Daesong Bank and managed $85 million for another group with North Korean governmental connections. Han coordinated transactions exceeding $630,000 for Ryugyong Commercial Bank. Jong served as DPRK Foreign Trade Bank’s chief representative in Vladivostok, Russia. Choe facilitated transactions over $200,000 for the DPRK Central Bank, coordinating travel for Russian officials visiting Pyongyang. Ri facilitated transactions worth $350,000 for FTB’s proxy.” – US Treasury Department Announcement