The U.S. Justice Department has filed an official complaint to forfeit as many as 280 cryptocurrency accounts that were used by North Korean hackers to steal money from two cryptocurrency exchanges and laundering the money with the help of Chinese over-the-counter (OTC) cryptocurrency traders.
The complaint has been filed not long after two Chinese nationals were charged for laundering over $100 million worth of cryptocurrency that was stolen by North Korean hackers from a hacked cryptocurrency exchange.
According to the U.S. Department of Justice, over $250 million worth of cryptocurrency was stolen by hackers from two cryptocurrency exchanges in 2018 and the hackers used false identities and doctored photographs to circumvent multiple virtual currency exchanges’ know-your-customer controls.
The hackers also laundered the stolen money through hundreds of automated cryptocurrency transactions to prevent law enforcement agencies from tracking the movement of the funds. Not only were the agencies able to trace the funds, they also found that a portion of the stolen funds was used to pay for infrastructure used in North Korean hacking campaigns against the financial industry.
The two Chinese nationals used as many as 113 virtual currency accounts and addresses to launder funds on behalf of North Korean hackers and also operated in the United States without registering with the Financial Crimes Enforcement Network (FinCEN).
Commenting on the civil forfeiture complaint filed by the Justice Department, Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division said that the action publicly exposes the ongoing connections between North Korea’s cyber-hacking programme and a Chinese cryptocurrency money laundering network.
Funds laundered by the Chinese nationals included over $272,000 stolen by North Korean hackers from a virtual currency exchange in July last year. Aside from cryptocurrency, the hackers also stole Proton Tokens, PlayGame tokens, and IHT Real Estate Protocol tokens and laundered them through several intermediary addresses and other virtual currency exchanges.
The hackers also stole nearly $2.5 million from a US-based company in September 2019 after gaining access to the company's virtual currency wallets, funds held by the company on other platforms, and funds held by the company’s partners. The stolen money was then laundered through over 100 accounts at another virtual currency exchange.
“Today’s complaint demonstrates that North Korean actors cannot hide their crimes within the anonymity of the internet. International cryptocurrency laundering schemes undermine the integrity of our financial systems at a global level, and we will use every tool in our arsenal to investigate and disrupt these crimes,” said Special Agent in Charge Emmerson Buie Jr. of the FBI’s Chicago Field Office.