U.S. Sanctions North Korean Crypto Launderers: How Hack Money Moved Through the Blockchain

Over the past decade, crypto has grown into a global financial system of its own. It allows people to move money quickly, experiment with new financial tools, and build businesses without needing traditional banks. But alongside this rapid growth, criminals and state-sponsored groups have also used crypto to hide stolen funds or finance harmful activities. The recent sanctions announced by the U.S. Treasury against a group of North Korean bankers and operators make this issue clearer than ever.

These sanctions were not random. They were the result of years of investigation into how North Korean hackers stole large amounts of crypto through high-profile hacks and quietly moved the money through different services to hide the trail. The U.S. Treasury Department has sanctioned eight people and two companies for allegedly using cryptocurrency and fake businesses to move millions of dollars into North Korea’s weapons programs. According to OFAC, North Korean groups laundered at least $5.3 million in digital assets through banks that were already under sanctions. A blockchain research firm, Elliptic, reports that North Korea stole about $2 billion worth of crypto in 2025 alone.

The newly sanctioned companies First Credit Bank, Ryujong Credit Bank, and Korea Mangyongdae Computer Technology Company (KMCTC) are accused of working with middlemen in China and Russia to hide where the crypto came from. These hidden transactions were then used to help fund North Korea’s weapons development. Because these actors operate across borders and use a mix of traditional bank accounts and crypto services, sanctions are one of the few tools available to cut them off from the global financial system.

 

The sanctions freeze any assets the targets may have in the United States and make it illegal for U.S. citizens and companies to do business with them. Even companies outside the U.S. often follow these rules to avoid losing access to the American financial system. This means that major exchanges around the world must now block accounts linked to these individuals, increasing scrutiny on transactions that appear connected to North Korean activity. These restrictions may lead to longer processing times for certain high-risk transactions, something users may have already noticed during past enforcement waves following hacks like the Ronin bridge exploit.

How the Stolen Crypto Was Taken and Laundered

The money involved in these sanctions can be traced back to several famous hacks. One of the most notable is the Ronin Network breach in 2022, where attackers stole hundreds of millions of dollars worth of crypto by breaking into a cross-chain bridge. Similar attacks on Harmony and Poly Network also contributed to the pool of stolen assets.

 

 

Once the hackers had the funds, the challenge was to make them usable without getting caught. They used a layered process that tried to make the money’s origin harder to follow. In the first stage, the stolen crypto was often sent to mixers. Mixers are services that combine funds from many users and then redistribute them, making it difficult to tell where the money originally came from. After regulators cracked down on major mixers, these actors shifted to decentralized exchanges and used instant token-swapping tools to convert the stolen assets into different coins. Later, they used over-the-counter traders, shell companies, and banks in regions with weaker oversight to turn the crypto into regular money.

Even though these methods were complex, blockchain-analysis tools eventually uncovered the patterns. Investigators could connect the transactions to known North Korean wallets, which became a key part of the evidence that led to the sanctions.

The sanctions have wider consequences than just freezing a few accounts. They push exchanges, wallets, and payment services to strengthen their compliance systems. Advanced screening tools are now used to check wallet addresses, and companies must report suspicious activity much more quickly. Countries around the world are also beginning to adopt similar standards, making international regulation more unified.

A Step Toward a Safer Crypto Environment

The sanctions against North Korean operatives show how seriously governments now treat crypto-related crime. They also highlight the growing ability of investigators to track even sophisticated laundering schemes on the blockchain. As enforcement increases, both institutions and everyday users must adopt better habits to stay safe and compliant. Understanding how these systems work does not only protect your finances, it strengthens the overall trust and stability of the crypto world as it continues to grow.