A cryptocurrency developer in California discovered that a freelancer he hired was actually a money launderer for North Korea's Kim Jong-un regime, exposing the North's meticulous methods for earning foreign currency.
The Wall Street Journal (WSJ) reported on the 25th, citing U.S. prosecutors and cybersecurity experts, on the activities of Sim Hyun-seop, 42, a former head of an affiliate of North Korea's Foreign Trade Bank. According to the report, $216,000 (about 311 million won) that a U.S. developer paid believing the recipient was a Singaporean freelancer ultimately flowed into a digital wallet controlled by Sim.
Sim received cryptocurrency earned by North Korean information technology (IT) workers through hacking or disguised employment and converted it into dollars. To evade law enforcement tracking, he routed funds through multiple digital wallets and then cashed out through bribed brokers in the Middle East or China, moving the money into accounts of front companies.
What is particularly startling is that Sim deceived the U.S. financial system by securing 310 transactions worth about $74 million (about 10.96 billion won) with well-known Western banks such as Citi, JPMorgan, and Wells Fargo. Rather than remitting the funds directly to North Korea, he completed the laundering by purchasing luxury goods for the Kim Jong-un regime or items needed for weapons programs.
An elite operative who graduated from a prestigious university in Pyongyang and is fluent in English and Chinese, Sim mainly operated in the Middle East, including the United Arab Emirates (UAE) and Kuwait, under aliases such as "Sim Ali." Ryu Hyun-woo, a former minister-counselor who defected in 2019, testified that he met him more than 10 times and described Sim as one of the key figure dispatched overseas to meet North Korea's financial needs.
The Federal Bureau of Investigation (FBI) has placed a $7 million (about 1.04 billion won) bounty on Sim and is pursuing him, but arresting him is extremely difficult. The U.S. Treasury believes he was expelled from the UAE in 2022 and now resides in Dandong, China, but Chinese authorities say they are unaware of his activities and maintain their opposition to what they call unilateral U.S. sanctions.