North Korean Military Hackers Arrested Over Crypto Laundering Scheme

North Korean authorities have reportedly arrested former military hackers accused of siphoning funds from state-owned banks and laundering the proceeds through cryptocurrency.

The arrests were first reported on July 25 UTC by CoinDesk, citing Daily NK and an anonymous source in Pyongyang. The suspects allegedly infiltrated internal systems at the Central Bank of North Korea and Korea Trade Bank, diverted foreign currency and state trade funds, and moved the money into overseas crypto wallets to obscure the trail.

Investigations believe the funds were routed through China-based brokers, converted into U.S. dollars and Chinese yuan, and cashed out with help from intermediaries in North Korea's border cities, reportedly including Sinuiju and Hyesan, where long-standing informal finance channels facilitate trade and currency exchange.

The alleged laundering route mirrors patterns previously identified by sanctions monitors tracking how North Korean-linked groups monetize stolen crypto. The timing underscores the scale of North Korea’s crypto-linked revenue streams, with blockchain analytics firm Chainalysis saying North Korean hackers stole a record $2 billion in cryptocurrency last year.