Seoul weighs sanctions on North Korea after U.S. crypto crackdown

South Korea signals flexibility as Washington tightens pressure on Pyongyang’s crypto-fueled cybercrime.

South Korea is considering tightening its stance on North Korea after the U.S. unveiled a new round of sanctions targeting Pyongyang’s crypto theft and laundering networks — operations believed to be funding its weapons programs.

In a Thursday interview with Yonhap News TV, Second Vice Foreign Minister Kim Ji-na said Seoul could “review sanctions if necessary,” emphasizing close coordination with Washington on countering North Korea’s growing digital threats.

“When Pyongyang steals cryptocurrency, those funds can be diverted into nuclear and missile programs,” Kim said. “That makes U.S.-Korea cooperation crucial, not just for security, but for the safety of our digital ecosystem.”

The U.S. tightens the net

Earlier this week, the U.S. Treasury Department announced new sanctions against eight North Korean nationals and two front companies accused of laundering stolen crypto through networks in China and Russia.

Among those sanctioned are U Yong Su, president of the state-run Korea Mangyongdae Computer Technology Company (KMCTC), and two bankers, Jang Kuk Chol and Ho Jong Son, described as key players in North Korea’s global crypto laundering operations.

Treasury officials allege these entities moved stolen digital assets to bankroll Pyongyang’s weapons development — with Ryujong Credit Bank specifically cited for helping repatriate profits from North Korean IT workers deployed abroad.

According to a report from the Multilateral Sanctions Monitoring Team (MSMT), North Korea has stolen $2.84 billion in cryptocurrency since January 2024 — including at least $1.65 billion between January and September alone. Much of that came from major hacks earlier this year, such as February’s Bybit breach.

A long history of digital subterfuge

North Korea’s use of cybercrime to fund its weapons program is nothing new. “The escalation traces back to the 2016 nuclear tests, when major exchanges between the two Koreas were cut off,” said Ryan Yoon, senior analyst at Tiger Research in Seoul.

Since then, he explained, South Korea has maintained a series of smaller, targeted sanctions aligned with broader global efforts. “There’s a high possibility of more sanctions coming,” Yoon added, “but the actual impact may be limited — this cycle has been repeating for decades.”

Reinforcing global pressure

Experts say that even if South Korea introduces new measures, they would serve more as a symbolic reinforcement than a standalone deterrent.

“Sanctions by a major authority like OFAC already cut North Korea off from much of the global financial system,” said Angela Ang, head of policy and strategic partnerships for Asia-Pacific at TRM Labs. “If South Korea follows with its own sanctions, it would underscore alignment with the U.S. and strengthen the overall message.”

Coordinated strategy on the horizon

Vice Minister Kim also noted that the U.S. and South Korea are finalizing a joint fact sheet summarizing outcomes from the recent summit between President Lee Jae Myung and U.S. President Donald Trump.

“The U.S. side is still reviewing and adjusting the language,” Kim said.

As Washington expands its crypto-related sanctions against North Korea, Seoul’s response could mark a new phase of coordinated pressure — one where digital finance, cybersecurity, and geopolitics converge in an increasingly high-stakes contest.