South Korea may reconsider its sanctions approach toward North Korea after new US measures connected Pyongyang’s crypto theft operations to the funding of its weapons programs.
Key Takeaways:
South Korea is weighing a review of its sanctions policy after the US linked North Korea’s crypto theft operations to weapons funding. The US Treasury targeted eight North Koreans and two entities, including KMCTC and Ryujong Credit Bank, for laundering stolen crypto. Pyongyang’s cyber tactics remain a major source of illicit financing for its weapons programs.In an interview with Yonhap News TV on Thursday, Second Vice Foreign Minister Kim Ji-na said Seoul could “review sanctions as a measure if they are really needed,” stressing close coordination with Washington to counter North Korea’s growing cyber and digital threats.
“In cases of cryptocurrency theft by Pyongyang, coordination between South Korea and the US is important, as it can be used to fund North Korea’s nuclear and missile programs and pose a threat to our digital ecosystem,” Kim stated.
US Targets North Korean Crypto Laundering Network Tied to Weapons Funding
Her comments followed the US Treasury Department’s latest sanctions against eight North Korean nationals and two entities accused of laundering stolen cryptocurrency.
Among them were the Korea Mangyongdae Computer Technology Company (KMCTC) and Ryujong Credit Bank, both alleged to have funneled illicit digital funds to finance weapons development.
Treasury officials identified KMCTC president U Yong Su, as well as Jang Kuk Chol and Ho Jong Son, as central figures in laundering operations tied to ransomware and fraud schemes.
The measures target DPRK-linked operatives in China and Russia who allegedly managed front companies and accounts used to repatriate proceeds from North Korean IT workers abroad.
According to Ryan Yoon, senior analyst at Tiger Research, the move marks a continuation of sanctions that began after North Korea’s 2016 nuclear test.
“Since then, small-scale sanctions have continued to be imposed,” Yoon said, adding that while further actions are likely, their economic impact may remain limited. “This has been happening for decades,” he noted.
The renewed scrutiny underscores Seoul’s intent to align with Washington on countering North Korea’s cyber operations, which remain a persistent source of illicit funding for its weapons ambitions.
North Korea Linked to Major Crypto Hacks
North Korea has also been linked to several other major crypto heists, including those targeting Bybit, the Ronin Bridge, Harmony, and various DeFi platforms.
Global law enforcement is responding. The US Department of Justice recently moved to seize over $7.7 million in digital assets tied to North Korean IT workers embedded in blockchain firms.
Meanwhile, the US and South Korea signed a bilateral agreement in 2023 to enhance their technical capabilities in detecting and countering DPRK cyber operations.
North Korean cyber strategies continue to evolve. In April, Lazarus-linked operatives reportedly set up US-based shell companies to distribute malware to crypto developers.
Kraken recently thwarted an infiltration attempt by a suspected North Korean posing as a job candidate.
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