US Authorities Freeze DPRK Cyber Crime Funds With the Aid of Binance
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The United States Treasury Office of Foreign Assets Control (OFAC) has frozen approximately $4.4 million connected to cybercriminal organizations in North Korea with the help of crypto exchange Binance.
Binance Flags Illicit Accounts and Freezes Funds
Binance, one of the world’s leading cryptocurrency exchanges, has played a critical role in assisting U.S. authorities in freezing $4.4 million linked to North Korean cybercrime organizations.
The exchange announced its collaboration with U.S. law enforcement on May 25th in a Twitter thread to disrupt the “illicit revenue generation activities” of four entities in North Korea.
This was accomplished through the efforts of the Binance Investigations team.
We are proud to have assisted US law enforcement in seizing $4.4M and freezing accounts linked to North Korean organized crime.
Kudos to our law enforcement partners and the Binance Investigations team for their unwavering commitment to combating crime worldwide.
— Binance (@binance) May 24, 2023
Binance stated that it took proactive measures over a year ago to target and take action against any accounts linked to individuals involved in such activities.
It further highlighted that all required steps were carried out in accordance with legally issued warrants and cooperation with law enforcement agencies.
Cryptocurrencies – due to their decentralized nature and pseudo-anonymity – have been exploited by criminal organizations for money laundering and illicit transactions.
While the blockchain technology underlying cryptocurrencies offers transparency, tracing the real-world identities behind transactions can be challenging without the cooperation of exchanges and other stakeholders.
However, Binance’s proactive stance in combating illicit activities has been evident through its robust compliance and anti-money laundering measures.
In this case, the crypto exchange identified and froze $4.4 million in assets linked to North Korean cybercrime organizations.
Treasury Combats North Korea’s Cyber Threats And Illicit IT Operations
The Office of Foreign Assets Control, under the Department of the Treasury, issued a statement on May 23rd, revealing the imposition of sanctions on one individual and four entities.
These sanctions were imposed due to their involvement in malicious cyber activities in support of the government of the Democratic People’s Republic of Korea (DPRK).
The DPRK engages in malevolent cyber operations and employs IT personnel who deceitfully secure jobs to generate income, including through virtual currencies.
This revenue is utilized to support the Kim regime and its unlawful pursuits, such as the development of illegal ballistic missile programs and weapons of mass destruction.
According to the Treasury, the Chinyong Information Technology Cooperation Company, the Pyongyang University of Automation, the 110th Research Center, and the Technical Reconnaissance Bureau were identified as the four entities involved.
The Chinyong company is suspected of employing thousands of highly skilled IT workers worldwide. These workers engage in activities that generate revenue for the DPRK’s unlawful weapons of mass destruction and ballistic missile programs.
These individuals use counterfeit or stolen identities to apply for IT positions overseas, particularly in the fields of technology and cryptocurrency.
They then channel the payments back to the DPRK through cryptocurrency exchanges, thus laundering the funds.
According to the Treasury press release, a March 2023 UN Panel of Experts report stated that cyber actors from the DPRK stole more virtual currency in 2022 than in any previous year.
The amount stolen is estimated to be between $630 million and over $1 billion.
This figure reportedly doubled the total cyber theft proceeds obtained by Pyongyang in 2021.
The Under Secretary of the Treasury for Terrorism and Financial Intelligence, Brian E. Nelson, emphasized that this action highlights the DPRK’s extensive illicit cyber and IT operations to finance the regime’s unlawful weapons of mass destruction and ballistic missile programs.
He further reiterated the commitment of the United States and its partners to combat the DPRK’s illicit revenue-generation activities. These efforts are aimed at countering their persistent efforts to steal money from financial institutions, virtual currency exchanges, companies, and individuals worldwide.