A media report published in South Korea has revealed traces of financial transactions between Iran’s regime and North Korea, both US-sanctioned states, signaling the two countries’ increasing use of non-traditional financial tools to circumvent restrictions on their banking systems.
According to blockchain tracking sources, transactions between both countries 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 Iranian Revolutionary Guard Corps (IRGC), the South Korean Chosun Ilbo newspaper said in an article published last Friday.
It said investigations by TRM Labs show that dollars were transferred this year from a cryptocurrency wallet belonging to Sim Hyon-sop, a North Korean money launderer, to a wallet linked to the Revolutionary Guard.
According to the newspaper, Iran’s regime may have exchanged cryptocurrency to evade sanctions, convert funds into US dollars, or even pay for oil.
It said Iran and North Korea, both under severe US sanctions, have increasingly turned in recent years to opaque financial tools, mainly cryptocurrencies.
Analysts told the newspaper that these transactions are a sign of overlapping financial networks between the two countries aimed at circumventing the sanctions system.
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.
According to the newspaper, Sim saw his bounty rise from $5 million to $7 million (approximately 10 billion Korean won) in July.
Born in Pyongyang in 1983, he is affiliated with North Korea’s Foreign Trade Bank, which has been on US sanctions lists.
He used aliases such as “Sim Ali” and “Sim Hajim” and posed as a representative of Kwangson Bank.
Chosun Ilbo said Sim’s laundering process was meticulous: North Korean “IT workers” sent him cryptocurrency stolen through hacking or received as wages, routing it through multiple digital wallets to obscure traces.
Sim then transferred the funds to pre-selected brokers in an Arab country or China, who converted them into US dollars.
Also, foreign currency earned by North Korean laborers in Russia, China, and Africa flowed into Sim’s accounts via similar laundering routes.
The newspaper showed that part of the earnings were not sent directly to North Korea but were 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 helicopter in Russia and deliver it to North Korea.
Additionally, the newspaper said about $800,000 were spent to procure raw materials for producing counterfeit cigarettes, one of Pyongyang’s main sources of income.
The Chosun Ilbo report stated that US banks, including Citibank, JPMorgan, and Wells Fargo, failed to detect Sim’s money-laundering activities. It said at least 310 transactions totaling $74 million were processed through the US financial system.
Referring to data from the Financial Action Task Force (FATF) and Chainalysis, the report said dozens of North Korean “shadow bankers” are active outside the country. Over several years, they have laundered more than $6 billion in stolen cryptocurrency for the regime.
Chosun Ilbo said that although the US federal court had issued an arrest warrant for Sim in March 2023, his capture remains nearly impossible.
