In brief
- South Korea is signaling flexibility following U.S. actions on North Korea’s crypto laundering activities.
- The U.S. Treasury has issued a new set of sanctions targeting 8 individuals and 2 entities tied to Pyongyang’s hacks.
- Illicit funds have allegedly supported DPRK’s nuclear weapons program.
South Korea is considering the possibility of revisiting its sanctions framework on North Korea, days after a new U.S. sanction has linked Pyongyang’s crypto theft operations to weapons financing.
Speaking in an interview with Yonhap News TV on Thursday, Second Vice Foreign Minister Kim Ji-na said Seoul “can consider reviewing sanctions as a measure if they are really needed,” citing the importance of U.S.-Korea coordination on digital threats posed by the North.
“In cases of cryptocurrency theft by Pyongyang, coordination between South Korea and the U.S. is important, as it can be used to fund North Korea’s nuclear and missile programs and pose a threat to our digital ecosystem,” Kim said, adding that any potential review would be context-driven.
The official’s remarks follow a new set of sanctions released by the U.S. Treasury Department earlier this week targeting eight North Korean individuals and two entities for laundering cryptocurrency stolen through cyberattacks.
The sanctions included state-run IT front Korea Mangyongdae Computer Technology Company and DPRK-linked financial representatives in China and Russia, with U.S. authorities alleging those entities moved illicit digital funds to support the North’s weapons development programs.
Treasury officials also named KMCTC president U Yong Su, along with bankers Jang Kuk Chol and Ho Jong Son, as key facilitators of crypto laundering tied to ransomware and fraud schemes. Ryujong Credit Bank, another sanctioned entity, reportedly helped repatriate earnings from North Korean IT workers deployed abroad.
The escalation follows “North Korea’s nuclear test in 2016,” where “large-scale exchanges between the two countries were completely severed,” Ryan Yoon, senior analyst at Seoul-based Tiger Research, told Decrypt.
“Since then, small-scale sanctions have continued to be imposed,” Yoon said, noting how these aligned with global trends aimed at curbing Pyongyang’s actions.
Yoon acknowledges a “high possibility” of more sanctions coming in, but notes that the impact may not be as significant. “This has been happening for decades,” he added.
Indeed, the move “would not be the first time South Korea has issued its own independent sanctions against North Korea following U.S. actions,” Angela Ang, head of policy and strategic partnerships for Asia Pacific at TRM Labs, told Decrypt.
“Sanctions by a major authority like OFAC already have far-reaching implications in cutting off access to the global financial system. Additional sanctions by South Korea would be seen as a reinforcement of these actions,” Ang said.
Vice Minister Kim said the U.S. was still finalizing a joint fact sheet on the outcome of the recent summit between President Lee Jae Myung and U.S. President Donald Trump.
“The U.S. side is currently working on adjusting and reviewing the wording,” Kim said in the televised statement.
Decrypt reached out to the Treasury Department for comment.
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