A report published in South Korea has revealed the identification of financial transactions between Iran’s regime and North Korea.
According to blockchain tracking sources, these transactions were carried out through the money-laundering network of a North Korean operative using cryptocurrencies, with part of the funds transferred to entities affiliated with the Islamic Revolutionary Guard Corps (IRGC).
The Chosun newspaper reported in an article published on Friday, December 26, that investigations by TRM Labs show that at least 67,000 dollars were transferred in February of this year from a cryptocurrency wallet belonging to SIM HYON-SOP, a North Korean money launderer, to a wallet linked to the Islamic Revolutionary Guard Corps. According to the newspaper, these data indicate that Iran’s regime may have used cryptocurrency to evade sanctions, convert funds into U.S. dollars, or even pay for oil.
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Chosun emphasizes that Iran and North Korea, both under severe U.S. sanctions, have increasingly turned in recent years to opaque financial tools, including cryptocurrencies. From analysts’ perspective, identifying these transactions is a sign of overlapping financial networks between the two countries aimed at circumventing the sanctions system.
The report goes on to say that SIM HYON-SOP, who is wanted by the FBI on charges of money laundering and sanctions evasion, has played a key role in this network. The reward for his capture was increased in the summer of this year from five million dollars to seven million dollars. SIM, born in 1983 in Pyongyang, has cooperated with North Korea’s Foreign Trade Bank and is listed under U.S. sanctions.
According to Chosun, SIM was mainly active in Kuwait and the United Arab Emirates and used aliases such as “Sim Ali” and “Sim Hajim,” presenting himself as a representative of Kwangson Bank. His network included North Korean information technology workers who, after obscuring transaction trails, transferred cryptocurrencies obtained from hacking or wages to wallets under SIM’s control.
These funds were then converted into U.S. dollars through brokers in the United Arab Emirates or China and, after multiple laundering transactions, deposited into accounts of shell companies established in Hong Kong. According to the report, foreign currency earnings of North Korean workers in Russia, China, and Africa also entered SIM’s network through the same route.
Chosun writes that part of this money was not sent directly to North Korea but was instead spent on purchasing goods, equipment, and even weapons needed by Kim Jong Un’s regime. Among the examples cited is the use of a company in Zimbabwe to purchase a 300,000-dollar helicopter in Russia and deliver it to North Korea. Additionally, about 800,000 dollars were spent to procure raw materials for producing counterfeit cigarettes, one of Pyongyang’s main sources of income.
Another part of the report states that U.S. banks, including Citibank, JPMorgan, and Wells Fargo, failed to detect SIM’s money-laundering activities, and at least 310 transactions totaling 74 million dollars were processed through the U.S. financial system.
Referring to data from the Financial Action Task Force and the company Chainalysis, the report adds that dozens of North Korean “shadow bankers” are active outside the country and over several years have laundered more than six billion dollars in stolen cryptocurrency for the regime.
Chosun concludes that despite the issuance of an arrest warrant for SIM HYON-SOP by a U.S. federal court in March 2023, his capture still appears difficult and nearly impossible, a matter that observers say highlights serious gaps in international financial oversight and the challenges of confronting joint money-laundering networks involving countries such as Iran and North Korea.
