The U.S. government said it seized 280 cryptocurrency accounts tied to the theft of millions in cryptocurrency involving North Korean hackers and Chinese money launderers.

The Department of Justice (DoJ) filed a civil forfeiture complaint relating to two cases where North Korean «actors» allegedly hacked cryptocurrency exchanges resulting in theft valued in the millions. These funds were then laundered via over-the-counter traders in what the statement described as a «Chinese cryptocurrency money laundering network».

«Today’s action publicly exposes the ongoing connections between North Korea’s cyber-hacking program and a Chinese cryptocurrency money laundering network,» said acting assistant attorney general Brian C. Rabbitt of the criminal division.

Crypto Laundering How-To

The forfeiture complaint alleges that in one case, an exchange was hacked and North Korean actors stole alternative cryptocurrencies – «Proton Tokens», «PlayGame» tokens and «IHT Real Estate Protocol» tokens worth over $272,000 – which were then laundered through several intermediary addresses and exchanges.

In many instances, laundering involved conversion to more widely adopted cryptocurrencies like Bitcoin or Tether to into BTC, Tether, in order to «obfuscate the transaction path» – a process known as «chain hopping».

In the other case, one U.S.-based company’s virtual currency wallet was hacked and the funds belonging to the firm ($2.5 million) and its partners were stolen and laundered via 100 accounts at another virtual currency exchange.

«Chinese OTC Actors»

The two cases total just around $2.8 million but it follows a separate forfeiture action in March 2020 involving $250 million which the DoJ claims also involved infrastructure and communication accounts tied to North Korea.

In all the cases above, «the same group of Chinese [over-the-counter] actors» were involved, the DoJ added.

«Although North Korea is unlikely to stop trying to pillage the international financial sector to fund a failed economic and political regime, actions like those today send a powerful message to the private sector and foreign governments regarding the benefits of working with us to counter this threat,» Rabbitt said.