North Korean Cryptocurrency Laundering: UN Report Unveils Significant Findings

North Korean Cryptocurrency Laundering: UN Report Unveils Significant Findings

UNITED NATION : A recent report by United Nations sanctions monitors has brought to light the extensive and sophisticated methods employed by North Korean IT workers and cybercriminals to generate substantial income for the country. The findings indicate that North Korea has been exploiting the virtual currency platform Tornado Cash to launder stolen cryptocurrency funds, contributing significantly to the nation’s economy amid ongoing international sanctions.

According to the confidential report, North Korea utilized Tornado Cash in March to launder $147.5 million that had been stolen from the HTX cryptocurrency exchange late last year. This incident is part of a broader pattern of cyberattacks and cryptocurrency thefts orchestrated by North Korean actors. Since 2017, the UN monitors have investigated 97 suspected cyberattacks on cryptocurrency companies, resulting in an estimated total theft of approximately $3.6 billion.

The monitors, who shared their findings with a UN Security Council sanctions committee, cited data from crypto analytics firm PeckShield and blockchain research firm Elliptic. These sources provided detailed insights into the methods and scale of North Korea’s cybercriminal activities. In 2024 alone, the monitors investigated 11 cryptocurrency thefts valued at $54.7 million, suggesting the involvement of North Korean IT workers employed by small, crypto-related companies.

North Korea, officially known as the Democratic People’s Republic of Korea (DPRK), has been under UN sanctions since 2006. These sanctions aim to restrict funding for the country’s ballistic missile and nuclear programs. However, North Korea has continued to find innovative ways to circumvent these restrictions. The recent report underscores the role of cryptocurrency theft and laundering in funding the DPRK’s illicit activities.

The use of virtual currency ‘mixer’ platforms like Tornado Cash has been a key strategy for North Korean cybercriminals. These platforms blend different streams of cryptocurrencies, making it difficult to trace the origin and ownership of the funds. The US has previously sanctioned Tornado Cash, accusing it of supporting North Korea’s money laundering efforts. Two co-founders of Tornado Cash have been charged with facilitating these illicit activities.

Beyond the realm of cybercrime, the UN report also raises alarms about North Korea’s ongoing involvement in the illicit arms trade and sanctions evasion. The monitors highlighted suspected shipments of arms between North Korea’s Rajin port and Russian ports, as well as reports of North Korean cargo ships offloading coal in Chinese waters. These activities suggest continued efforts by North Korea to bypass international sanctions.

Both China and Russia have declined to comment on the findings of the UN monitors, reflecting the complex geopolitical dynamics surrounding North Korea’s sanctions evasion strategies. The report calls for heightened vigilance and coordinated international efforts to address the multifaceted challenges posed by North Korea’s illicit activities.

In summary, the UN report sheds light on the extensive and intricate operations conducted by North Korean IT workers and cybercriminals. Their use of platforms like Tornado Cash to launder stolen cryptocurrency highlights a significant avenue for the DPRK to generate income and sustain its prohibited programs. The findings emphasize the need for robust international measures to counter North Korea’s evolving strategies and ensure the effectiveness of global sanctions.

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