The US Treasury Department’s Office of Foreign Assets Control (OFAC) has sanctioned several cryptocurrency traders in China and Hong Kong for converting stolen cryptocurrency into fiat currency for North Korea’s Lazarus Group. Wu Huihui, a China-based cryptocurrency trader, was sanctioned for converting millions of dollars’ worth of cryptocurrency into fiat currency for North Korean cyber actors in multiple transactions in 2021. Cheng Hung Man, a British national based in Hong Kong, was sanctioned for providing material support to Wu by helping him access the US financial system using front companies to avoid detection. Sim Hyon Sop, a North Korean living in China, was sanctioned for allegedly coordinating financial transfers from traders, including Wu and Cheng, that eventually supported North Korea’s weapons of mass destruction and ballistic missile programs.
The US Justice Department has also unsealed two indictments against Sim, charging him with conspiring with OTC traders to use stolen funds to buy goods for North Korea and generating income through illegal employment in the US. The investigation involved the FBI and the South Korean government. The Lazarus Group has been associated with major crypto exploits such as the Harmony Bridge hack and the Ronin Bridge hack.