US Sanctions Two For Aiding North Korean Crypto Thieves

US authorities have sanctioned two Chinese nationals in an effort to hinder the North Korean hacking operation Lazarus Group, which has been implicated in crimes including spiralling cryptocurrency theft.

The US Treasury Department sanctioned mainland China-based virtual currency trader Wu Huihui for allegedly helping North Koreans who worked with Lazarus to lander its stolen digital currency.

Authorities sanctioned another Hong Kong-based currency trader, Cheng Hung Man, for allegedly helping Wu.

The two men allegedly made use of the international financial system, including the US banking sector, to render the funds usable by the North Korean government.

Virtual currency theft

Treasury undersecretary Brian Nelson said in a statement late on Monday that North Korea “continues to exploit virtual currency and extensive illicit facilitation networks to access the international financial system and generate revenue for the regime”.

Lazarus Group is considered an important source of revenues for the North Korean government.

It stole an estimated $1.7 billion (£1.4bn) in 2022, more than quadruple the figure from the previous year, according to blockchain analytics firm Chainalysis.

One of its targets was the gaming-focused blockchain Axie Infinity, from which the group stole $625m – believed to be the largest-ever cryptocurrency heist.

Espionage

The US Treasury said Lazarus Group is controlled by North Korea’s primary intelligence agency, the Reconnaissance General Bureau.

It allegedly carries out hacks against a wide range of government and private bodies for espionage and data theft as well as committing monetary crimes.

The Treasury also sanctioned Sim Hyon Sop, a mainland China-based financier accused of helping North Korea gain access to the global financial system through the use of shell companies, money laundering schemes and fraudulent bank accounts.