U.S. Treasury Sanctions North Korean-Owned Binance Wallets; Says Entities Used Funds to Support WMD Programs

The Binance-hosted wallets received more than $2 million worth of various cryptocurrencies that were then sent on to North Korean entities, OFAC alleged

AccessTimeIconMay 23, 2023 at 3:25 p.m. UTC
Updated May 24, 2023 at 9:11 a.m. UTC
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U.S. officials on Tuesday sanctioned a swath of crypto-holding wallets with alleged ties to the North Korean government, according to a statement from the Treasury’s Office of Foreign Assets Control (OFAC).

The blacklisted wallets – which contained bitcoin, ether, Tether’s USDT and Circle’s USDC – belonged to an individual named Sang Man Kim, a 58-year-old North Korean citizen, OFAC alleged. The wallets were hosted by crypto exchange Binance.

That’s not to say Binance actively controlled the wallets – they appear to be automatically-generated wallet addresses hosted by the exchange that any user can sign up for. There have been no transactions to or from these addresses over the past year, according to blockchain data.

“The DPRK conducts malicious cyber activities and deploys information technology (IT) workers who fraudulently obtain employment to generate revenue, including in virtual currency, to support the Kim regime and its priorities, such as its unlawful weapons of mass destruction and ballistic missile programs,” the OFAC press release said.

Binance had previously come under fire for allegedly facilitating bad actors’ efforts to circumvent sanctions. The exchange has since implemented stringent policies to purge North Korean actors from its platform, Binance Financial Crime Compliance Head Tigran Gambaryan told CoinDesk in April.

“We can confirm that Binance took action against accounts connected to these individuals over a year ago in compliance with lawfully served warrants,“ a spokesperson for Binance said in an email to CoinDesk. "Binance has a policy of cooperation and compliance with all lawful information requests and legal inquiries from government, local regulatory, and law enforcement authorities pertaining to investigations, prosecutions, and forfeiture actions.”

North Korean-linked hackers have executed a number of sizable exploits in the digital assets industry. In 2022, hackers with ties to that country’s regime plundered roughly $630 million worth of crypto, Reuters reported.

UPDATE (May 24, 09:11 UTC): Adds comment from Binance spokesperson in penultimate paragraph.

Edited by Stephen Alpher.


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Amitoj Singh is a CoinDesk reporter.

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Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.

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