DOJ aims to confiscate $7.7M in crypto allegedly tied to fraudulent North Korean IT workers

The U.S. Department of Justice (DOJ) issued a statement Thursday announcing forfeiture action against $7.74 million in cryptocurrency. The funds are allegedly tied to North Korean IT workers fraudulently infiltrating U.S. companies. The civil forfeiture complaint, filed on June 5, says the state was able to “freeze and seize” over $7.74 million in cryptocurrency, originally tied to North Korean Foreign Trade Bank representative Sim Hyon Sop. Now D.C. is moving to take ownership of the funds via the suit.

Fake IT workers allegedly sending crypto to North Korea

“For years, North Korea has exploited global remote IT contracting and cryptocurrency ecosystems to evade U.S. sanctions and bankroll its weapons programs,” Sue J. Bai, head of the DOJ’s National Security Division, is quoted as saying in the government press release. According to the DOJ, an FBI investigation is said to have revealed a “massive campaign” involving remote IT workers infiltrating U.S. businesses with fraudulent identities, or identities stolen from American citizens. “These tactics hid the North Koreans’ true location and identities, causing unwitting employers to hire them and pay them a salary, often in stablecoins, such as USDC and USDT,” the release notes. To obfuscate the money and send funds back to North Korea, workers allegedly used the following tactics:

• Fake accounts
• Micro-transactions
• Chain-hopping/Token-swapping
• Hiding value in NFTs (non-fungible tokens)
• Using U.S.-based accounts to “legitimize” activity
• Crypto mixing

US government use of crypto, fiat also criticized

U.S. Attorney Jeanine Ferris Pirro said of the forfeiture action: “Crime may pay in other countries but that’s not how it works here,” noting that “We will halt your progress, strike back, and take hold of any proceeds you obtained illegally.” Some might take issue with Pirro about that. And with Sue J. Bai about the bankrolling of weapons programs. In recent years, hundreds of millions of dollars in cryptocurrency have been funneled to “socially acceptable” U.S.-backed military initiatives in Ukraine, including for “lethal equipment.”

Billions in fiat currency have been sent to the Israeli military, as Gazans are killed and ousted from their homes, while the U.S. president backing this bankroll has a controversial, influence-cashgrab memecoin released while in office. Anyway one slices it, it is a messy situation, where “licit” uses of crypto seem to depend more on the power and geopolitical standing of the user, than they do ethics. None of this justifying any ostensible North Korean terror. Regardless, the DOJ release summarizes: “Today’s forfeiture action follows the Department’s announcement of two federal indictments charging Sim for allegedly conspiring (1) with North Korean IT workers to generate revenue through illegal employment at companies in the United States and abroad; and (2) with over-the-counter cryptocurrency traders to use stolen funds to buy goods for North Korea.”

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