US Sanctions Two Russians Over North Korean IT Workers’ Crypto Cash-Outs
The US action targets the cash-out stage of a scheme that the UN estimates generates $250 million to $600 million annually for North Korea.
ByWayne Jones
The US Treasury has sanctioned 10 individuals and one entity for allegedly helping North Korean IT workers earn money through fraudulent employment at legitimate businesses and convert cryptocurrency into cash.
The action targeted financial intermediaries in a network that generates hundreds of millions of dollars annually for Pyongyang.
How the Cash-Out Chain Worked
According to a report by Chainalysis, Russian nationals Ilya Aleksandrovich Boykov and Vitold Viktorovich Obertas converted millions of dollars in crypto for front companies that placed North Korean IT workers at businesses under false identities. The workers’ earnings ultimately helped fund the North Korean regime and its weapons programs.
The blockchain analytics firm traced one payment trail to a developer who contributed code to blockchain and DeFi projects. From late 2022 to early 2023, the worker’s wallet received stablecoin payments every two weeks, resembling a regular salary.
Those funds were converted into ETH and sent through consolidation wallets associated with sanctioned entities, before being passed to Boykov, who forwarded the cryptocurrency to Garantex, a Russian exchange that was later sanctioned by US authorities.
Obertas was also accused of acting as a financial intermediary for North Korean officials, with his wallet receiving funds from another sanctioned organization, Amnokgang Technology Development Company, which was involved in managing overseas IT worker delegations.
According to the Office of Foreign Assets Control (OFAC), the Russian changed nearly $2 million worth of crypto into fiat currency for North Korean officials.
