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The U.S. Department of Justice (DOJ) filed a lawsuit to seize 280 cryptocurrency accounts linked to North Korean hackers who stole cryptocurrencies worth millions of dollars.

The DOJ’s complaint follows its March 2020 civil and criminal actions against North Korean hackers who stole $250 million worth of cryptocurrencies.

North Korean hackers laundered stolen cryptocurrencies using Chinese OTC traders

In the complaint, the DOJ alleged that a North Korean hacker breached a virtual currency exchange in July 2019 and stole more than $272,000 worth of alternative cryptocurrencies and tokens such as Proton Tokens, PlayGame tokens, and IHT Real Estate Protocol tokens.

Over the following months, the North Korean hacker allegedly laundered the funds through several intermediary addresses and other virtual currency exchanges.

In many instances, that person allegedly converted the tokens into Bitcoin, Tether, or other type cryptocurrencies to obscure the transaction. That scheme is called “chain hopping,” a sophisticated laundering technique to prevent law enforcement from tracing the funds.

These North Korean hackers allegedly laundered the funds they stole using Chinese over-the-counter (OTC) cryptocurrency traders.

According to the DOJ, these cybercriminals committed their hacking and laundering of funds using infrastructure and communication accounts linked to North Korea.

Exposing North Korea and China’s cybercrime connections

In a statement, DOJ Criminal Division Acting Assistant Attorney General Brian  Rabbitt said the civil forfeiture complaint “publicly exposes the ongoing connections between North Korea’s cyber-hacking program and a Chinese cryptocurrency money laundering network. This case underscores the department’s ongoing commitment to counter the threat presented by North Korean cyber hackers by exposing their criminal networks and tracing and seizing their ill-gotten gains.”

On the other hand, DOJ National Security Division Assistant Attorney General John Demers commented, “Although North Korea is unlikely to stop trying to pillage the international financial sector to fund a failed economic and political regime, actions like those today send a powerful message to the private sector and foreign governments regarding the benefits of working with us to counter this threat.”

Meanwhile, Acting U.S. Attorney Michael R. Sherwin of the District of Columbia said, “This complaint reveals the incredible skill of our Cryptocurrency Strike Force in tracing and seizing virtual currency, which criminals previously thought to be impossible.”

Earlier this month, U.S. authorities disrupted the online fundraising campaigns and seized the cryptocurrency accounts of terrorist organizations Al-Qaeda, Al-Qassam Brigades, and Islamic State of Iraq and Syria (ISIS).

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