On Wednesday, Binance announced that it had participated in the blocking and seizure of $4.4 million worth of cryptocurrencies from actors working for the North Korean regime. The exchange highlighted the advantage provided by the transparency of blockchain, which can facilitate the work of law enforcement agencies.
Binance freezes cryptocurrencies associated with North Korean regime
Wednesday evening, Binance announced that it had assisted US authorities in the freezing and seizure of $4.4 million in cryptocurrencies, associated with North Korean cybercrime:
We are proud to have assisted US law enforcement in seizing $4.4M and freezing accounts linked to North Korean organized crime.
Kudos to our law enforcement partners and the Binance Investigations team for their unwavering commitment to combating crime worldwide.
– Binance (@binance) May 24, 2023
In fact, although the announcement only became official this week following action by the Office of Foreign Assets Control (OFAC), Binance had already taken action over a year ago on the accounts concerned:
“We took proactive action against accounts linked to these individuals more than a year ago, pursuant to lawful warrants and in collaboration with law enforcement. “
In its statement, OFAC refers to IT experts working for North Korea, in particular to help finance the regime’s ballistic programmes. The Lazarus group and its affiliations, which are behind numerous hacks in the ecosystem, are mentioned, as well as workers being recruited undercover for strategic positions in technology companies, particularly in the Web3 industry.
Chinyong Information Technology Cooperation Company, a company specialising in the recruitment of North Korean IT experts, is mentioned in the report. Its agents reportedly operate in Laos and Russia, and Kim Sang Man is named as one of those allegedly responsible for paying salaries in cryptocurrencies.
The blockchain at the service of law enforcement
Yesterday, in an article about fentanyl trafficking and the involvement of cryptocurrencies in it, we concluded that the transparency of digital assets could be an asset for law enforcement. Again, this news supports that argument, providing valuable information to the authorities. This point was also made by Binance:
“Blockchain offers enormous transparency, enabling law enforcement to uncover these types of crimes. We work closely with authorities around the world every day to help prevent crimes and take action against bad actors. “
At the same time, Changpeng Zhao (CZ), CEO and founder of the exchange, pointed a finger at the title of an article by our colleagues at CoinDesk. The headline implied that OFAC had sanctioned Binance, or at least the accounts of North Korean users, whereas it was the exchange itself that had carried out the blocking.
CZ used its usual ‘4’ for Fear, Uncertainty and Doubt (FUD) about the platform:
Meanwhile, Coindesk article title… 4. pic.twitter.com/3b0f1Tm88m
– CZ Binance (@cz_binance) May 24, 2023
While the amounts involved in these seizures are insignificant compared to the sums at stake in decentralised finance (DeFi) hacking cases, the repetition of such actions could at least force malicious actors to redouble their efforts to convert their cryptocurrencies into fiat currencies.
