Tornado Cash Implicated in North Korean $147.5M Laundering Case, Report

United Nations experts have disclosed that North Korea allegedly laundered $147.5 million through the cryptocurrency mixer Tornado Cash. 

The funds, stolen last year from the HTX cryptocurrency exchange, were reportedly cleaned in March of this year, an operation unveiled in documents submitted to a U.N. Security Council sanctions committee. The detailed investigation highlighted ongoing concerns regarding the illicit use of digital currencies by the Democratic People’s Republic of Korea (DPRK) to bypass international sanctions.

The UN monitors’ document, which has not yet been publicly released, draws on data from crypto analytics firms PeckShield and Elliptic. It presents a broader investigation into 97 suspected cyberattacks by North Korean entities targeting various cryptocurrency firms from 2017 to 2024, with stolen assets valuing around $3.6 billion. These activities are said to boost North Korea’s revenue significantly despite stringent international sanctions aimed at curtailing its nuclear and ballistic missile programs.

🇰🇵 NORTH KOREA LAUNDERED $147.5M THROUGH STOLEN CRYPTO

North Korea laundered $147.5 million through Tornado Cash after stealing it from a cryptocurrency exchange, according to a UN report.

Monitors investigated 97 suspected North Korean cyberattacks on cryptocurrency companies… pic.twitter.com/dIApZdh49T

— Mario Nawfal (@MarioNawfal) May 14, 2024

U.N. Monitoring and International Sanctions

The revelations come amid a contentious backdrop where the U.N. sanctions monitors were disbanded following a veto by Russia against the annual renewal of their mandate. This development has raised concerns about the continuity of oversight regarding North Korea’s compliance with international sanctions. The document shared with the Security Council is part of unfinished work by the disbanded group, indicating potential gaps in monitoring North Korea’s activities moving forward.

The monitors also reviewed cases from 2024, in which 11 cryptocurrency thefts worth $54.7 million were possibly linked to DPRK IT workers employed by small crypto-related companies. These instances underscore the challenges in policing the hiring processes within the cryptocurrency industry, which might inadvertently support the DPRK’s sanctioned activities. The U.N. sanctions against North Korea, in place since 2006 and strengthened over time, aim to block sources of funding for its prohibited nuclear and missile endeavors.

Enforcement Challenges and International Responses

The U.S. had previously sanctioned Tornado Cash in 2022, accusing it of aiding North Korean cybercriminal activities, including laundering over $1 billion. Despite the sanctions, the mixer continued to be implicated in laundering operations, demonstrating the difficulties in regulating decentralized cryptocurrency technologies. The case against Tornado Cash co-founder Roman Storm, who has pleaded not guilty to U.S. charges, further illustrates the complexities involved in prosecuting individuals linked to crypto laundering.

No immediate comment has been made by North Korea’s mission to the U.N. in response to the U.N. experts’ report. The document also highlights ongoing North Korean strategies to evade sanctions, such as using maritime routes to trade prohibited goods and engaging in ship-to-ship transfers of coal and petroleum, often with the alleged surrender of neighboring states.

The U.N. report paints a concerning picture of North Korea’s sophisticated use of cyber warfare and cryptocurrency theft to fund its sanctioned programs. The international community remains vigilant, with ongoing investigations into North Korea’s involvement in arms trade with Russia and its attempts to circumvent sanctions through complex financial and maritime networks.