How North Korea Launders Money using Cryptocurrency to Evade Sanctions

2022-10-8, Tara O

North Korea launders money via cryptocurrency to circumvent the banking system, according to a former National Intelligence Service (NIS) official who recently left the NIS. He initially exposed this information on a YouTube Channel Lee Bonk-gyu TV (이봉규tv), but the video is no longer available on the channel as it has been deleted for some reason.  The follow-on interview on the same topic, however, is available here.

The former NIS official Mr. Choi stated that North Korea transfers funds using cryptocurrency, which means the banks are not involved in the international transfers.  Bank transfers above certain threshold would be scrutinized by the governments, and would be prevented under the international sanctions, but the cryptocurrency bypasses the banking system.

Here is the process of laundering discovered, as described by Choi:

• Banks are hacked and money stolen.
• With the stolen money, cryptocurrency, such as BitCoin or Etherium, is bought
• Transfers cryptocurrency to Tehran (Iran), Damascus (Syria), Dubai (UAE) via links in email and PayPal
• Within those countries, cryptocurrency is further traded [known as “layering]
• After multiple small transactions, the cryptocurrency is transferred to China
• In China, the in-bound cryptocurrency is turned into cash
• The cash is transferred to North Korea