US Treasury says prioritize sanctioning North Korea for crypto hacking

Crypto hacks facilitated by North Korea help fund its weapons of mass destruction, U.S. Treasury Department’s Brian E. Nelson said on his recent visit to South Korea.

Fast facts

• Nelson met with representatives of South Korea’s Financial Services Commission (FSC) and Financial Intelligence Unit (KoFIU) on Tuesday to discuss digital assets, cybersecurity and anti-money laundering.

• The Treasury’s Under Secretary for Terrorism and Financial Intelligence told local media that he discussed future ways of cooperating on sanctions against North Korea.

• In March this year, Ethereum sidechain Ronin, on which runs popular play-to-earn game Axie Infinity, was hacked for over US$620 million in crypto. 

• The Treasury and the Federal Bureau of Investigation (FBI) allege the hack was perpetrated by the rogue state.

• State-backed North Korean hacker group Lazarus reportedly stole about US$400 million worth of digital assets last year, according to blockchain research firm Chainalysis.
• The cyberattacks on crypto are used to fund the country’s nuclear and ballistic missile programs, news agency Reuters reported, citing a United Nations report.

• Last month, the U.S. Treasury’s Office of Foreign Assets Control (OFAC) sanctioned virtual currency mixer Blender.io (Blender) for allegedly facilitating North Korea in obscuring the proceeds from its activities related to crypto theft.