The United States Treasury Department, in coordination with the United Arab Emirates (UAE), has imposed sanctions on two individuals and a UAE-based trading company for their roles in laundering digital assets to finance North Korea's weapons programs. The Treasury’s Office of Foreign Assets Control (OFAC) announced the measures on Tuesday, targeting Lu Huaying, Zhang Jian, and the company Green Alpine Trading LLC.

According to OFAC, the sanctioned individuals and the trading company facilitated cryptocurrency conversions to generate funds that were funneled to the North Korean regime. These funds allegedly supported North Korea’s weapons of mass destruction (WMD) and ballistic missile programs.

The Treasury's statement revealed that Lu Huaying and Zhang Jian, both Chinese nationals residing in the UAE, played key roles in the operation. Lu allegedly converted cryptocurrency into fiat currency to procure goods and services for North Korea between early 2022 and September 2023. Zhang, in addition to participating in currency operations, is believed to have acted as a courier for Sim Hyon Sop, a previously sanctioned executive of Korea Kwangson Banking Corporation in China.

Green Alpine Trading LLC, operating out of the UAE, is identified as a front company involved in money laundering to support these transactions. The company’s operations and its connection to Sim’s network drew significant scrutiny from authorities.

OFAC credited the UAE for its assistance in uncovering and disrupting the illicit activities. In a statement, Bradley T. Smith, Acting Under Secretary for Terrorism and Financial Intelligence, emphasized the need to counter North Korea’s exploitation of digital assets. “As the DPRK continues to use complex criminal schemes to fund its WMD and ballistic missile programs — including through the exploitation of digital assets — Treasury remains focused on disrupting the networks that facilitate this flow of funds to the regime.”

A report by blockchain intelligence firm TRM Labs estimated that North Korea stole between $600 million and $700 million worth of cryptocurrency in 2023 alone. Cumulatively, these thefts are believed to total $3 billion since 2017.

The newly imposed sanctions freeze the assets of Lu, Zhang, and Green Alpine Trading LLC within U.S. jurisdictions. Additionally, U.S. citizens and businesses are prohibited from conducting any transactions with the sanctioned parties. The move is part of a broader U.S. effort to curb North Korea’s ability to fund its weapons programs through illicit financial networks.

The sanctions come on the heels of other measures taken against North Korea, including recent penalties targeting banks and officials involved in supporting Russia’s war in Ukraine.

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