North Korean crypto group Lazarus sanctioned by OFAC, more inside

• The OFAC has sanctioned three individuals for providing material support to North Korean group Lazarus.
• North Korean actors stole crypto assets worth approximately $1.7 billion through hacking in 2022, claimed OFAC.

The Department of Foreign Assets Control (OFAC) collaborated with South Korea to sanction three individuals, who, as per the Department, were providing material support to the North Korea-based Lazarus hacking group in order to convert stolen crypto assets to fiat currency.

The Lazarus Group is linked to illicit financial and cyber activity supporting North Korea’s development of weapons of mass destruction (WMD) and ballistic missile programs, according to OFAC’s report.

The OFAC claimed that North Korean and Chinese over-the-counter (OTC) traders convert the stolen crypto assets to fiat. Allegedly, North Korea frequently conducts transactions on their behalf in order to avoid detection by financial institutions or competent authorities.

North Korea’s alleged crypto stance

Under-Secretary of the Treasury for Terrorism and Financial Intelligence, Brian E. Nelson, claimed that North Korea’s operations to raise funds for weapons of mass destruction (WMD) and ballistic missile programs directly threaten world security. He also noted that North Korea has already launched three intercontinental ballistic missiles this year.

OFAC claims that one of those charged obtained cryptocurrencies from North Korean citizens who were fraudulently undertaking IT services in other countries. In turn, the accused are believed to have directed OTC traders, the other two accused, to transfer funds to front firms, which were then used to purchase items such as tobacco and communication equipment.

North Korean actors stole crypto assets worth approximately $1.7 billion through hacking in 2022, claimed OFAC.

According to a report issued by Chainalysis in February this year, North Korea-linked hackers such as the Lazarus Group have been by far the most prolific cryptocurrency hackers in recent years. They stole an estimated $1.7 billion in cryptocurrencies in 2022, through numerous breaches traced to them. North Korea was one of the major forces behind the DeFi hacking trend, stealing $1.1 billion in DeFi protocol attacks.