Seoul is signaling the possibility of tightening sanctions against North Korea in response to the latest US actions that linked cyber thefts of cryptocurrencies to the nuclear program of the Kim Jong Un regime.
Battle on the Korean peninsula
South Korea may soon revise its sanctions framework against North Korea. This possibility was outlined by Deputy Foreign Minister Kim Ji-na in an interview with Yonhap News TV, just days after the US Treasury announced a new package of restrictions targeting the cryptocurrency laundering network controlled by Pyongyang.
We may consider reviewing sanctions as a measure if this is truly needed
– said Kim Ji-na, emphasizing the importance of coordination between Seoul and Washington in the face of digital threats from its northern neighbor.
The deputy minister noted that cryptocurrencies stolen by the regime can be used to finance nuclear and missile programs, while posing a threat to the South Korean digital ecosystem.
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New US sanctions targeting the cryptocurrency laundering network
Earlier this week, the U.S. Treasury announced sanctions targeting eight people and two organizations linked to North Korea accused of laundering cryptocurrencies obtained through cyberattacks. Those subject to restrictions included the state-owned Korea Mangyongdae Computer Technology Company and DPRK financial representatives operating in China and Russia.
According to US authorities, these entities were responsible for moving illicit digital assets in support of the weapons development program. Also on the sanctions list were KMCTC chairman U Yong Su and bankers Jang Kuk Chol and Ho Jong Son, described as key intermediaries in cryptocurrency laundering operations related to ransomware and fraud. Ryujong Credit Bank, in turn, was supposed to help repatriate the earnings of North Korean IT workers employed abroad.
Decades of sanctions, but the problem persists
Ryan Yoon, senior analyst at Seoul-based Tiger Research, recalls that the escalation of sanctions began after North Korea’s nuclear test in 2016, when “large-scale exchanges between the two countries were completely interrupted.” Since then, smaller, gradual restrictions have been imposed, consistent with global trends aimed at curbing Pyongyang’s activities.
Although Yoon acknowledges that there is a “high possibility” of further sanctions being introduced, he points out that their impact may not be that significant. “This has been happening for decades,” adds the analyst, suggesting that the market is somewhat accustomed to this type of measures.
Angela Ang, head of Asia-Pacific policy and strategic partnerships at TRM Labs, stressed that it would not be the first time South Korea imposed its own independent sanctions against the North following US actions.
Sanctions issued by such a serious body as OFAC already have far-reaching consequences in cutting off access to the global financial system. Additional sanctions from South Korea would be seen as reinforcing these actions
Seoul’s final decision may be made after finalizing the joint communiqué from the summit between President Lee Jae Myung and US President Donald Trump. According to Deputy Minister Kim, the American side is still working on refining the content of the document.
