OFAC Sanctions Chinese Nationals for Crypto Money Laundering - OhNo "WTF" Crypto

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OFAC Sanctions Chinese Nationals for Crypto Money Laundering

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The Office of Foreign Assets Control (OFAC) of the U.S. Treasury Department says it has sanctioned two Chinese nationals allegedly involved in crypto money laundering for North Korea cryptocurrency exchange hackers.

Several security experts say state-sponsored cybercrime syndicates from North Korea are behind many of the high-profile crypto exchange hacks especially those that targeted South Korean platforms.

U.S. government officials say North Korea is using proceeds from crypto cybercrime to fund its nuclear weapons program

Sanctioned Chinese Nationals Aided North Korean Crypto Hackers

According to a press release issued by the U.S. Department of the Treasury on Monday (March 2, 2020), OFAC has slammed sanctions on two Chinese nationals for crypto money laundering activities.

The two Chinese nationals — Tian Yinyin and Li Jiadong allegedly helped funnel money for the Lazarus Group — a state-sponsored cybercrime syndicate from North Korea.

An excerpt from the report reads:

“Tian and Li received from DPRK-controlled accounts approximately $91 million stolen in an April 2018 hack of a cryptocurrency exchange (referred to hereinafter as “the exchange”), as well as an additional $9.5 million from a hack of another exchange. Tian and Li transferred the currency among addresses they held, obfuscating the origin of the funds.”

Both men allegedly helped move about $35.4 million in illicit crypto funds, with Tian reportedly using prepaid Apple iTunes gift card to launder $1.4 million of the proceeds from the hack.

According to OFAC, the stolen crypto funds came from an unknown crypto exchange hack in April 2018 which resulted in the theft of $250 million in virtual currency tokens at the time.

As a result of the sanctions, properties belonging to both men in the U.S. are now forfeit with OFAC announcing that it has added 20 new Bitcoin (BTC) and Ethereum (ETH) addresses to its crypto sanctions list.

Lazarus Group Allegedly Responsible for Major Exchange Hacks

As previously reported by Blockonomi, Lazarus is allegedly the mastermind behind many cryptojacking and crypto exchange hacks. The North Korean cybercrime syndicate is notorious for targeting financial establishments with South Korea cryptocurrency exchanges falling victim to the hacking group.

Despite denials from Pyongyang, security experts say the cybercrime syndicate is constantly improving its hacking activities to increase their pay-outs from malicious cyber intrusions. According to officials from the United States and the United Nations (UN) North Korea is using the proceeds of these cyberattacks to fund its nuclear weapons program.

In 2019, reports emerged that North Korea obtained close to $2 billion from cyberattacks against banks, crypto exchanges, and other financial establishments.

US Keen on Stifling North Korean Cryptocurrency Adoption

OFAC’s recent sanctions are part of a larger effort by the U.S. government to stifle growing crypto adoption in North Korea. In late 2019, the government arrested Ethereum Foundation researcher Virgil Griffith for attending and participating in a blockchain conference in North Korea.

In mid-January 2020, the UN also warned the crypto and blockchain community not to attend any future industry conferences in North Korea. According to the UN, doing so amounts to a violation of sanctions placed against the country.

Authorities in Pyongyang are reportedly exploring various ways of using cryptos to circumvent economic sanctions from the U.S. Back in February 2020, reports emerged that the country’s leadership hierarchy was investing more resources in cryptocurrency mining activities.

Apart from Iran, other countries under U.S. economic sanctions like Venezuela and Iran have also taken to various forms of crypto adoption. Recently, an Iranian general proposed a nationwide crypto adoption as a way of evading U.S. sanctions. Bitcoin miners in the country also enjoy tax holidays as long as they repatriate their foreign earnings.

The post OFAC Sanctions Chinese Nationals for Crypto Money Laundering appeared first on Blockonomi.

OhNoCryptocurrency via https://www.ohnocrypto.com/ @Osato Avan-Nomayo, @Khareem Sudlow