Senior U.S. official accuses China of aiding North Korea cyber thefts

WASHINGTON (Reuters) - A senior U.S. justice official accused China on Thursday of helping North Korea launder money from massive cyber thefts it has carried out to raise funds in the face of international sanctions.

FILE PHOTO: North Korea's leader Kim Jong Un inspects a flood-hit site in Taechong-ri, Unpha County, North Hwanghae Province, North Korea in this image released September 11, 2020 by North Korea's Korean Central News Agency. KCNA via REUTERS

At an event hosted by a Washington think tank, John Demers, the assistant attorney general for national security, also said North Korea was likely getting support from China in the form of cyber expertise and training.

“The other thing ... that really pops out of our cases ... is the involvement of China in helping the North Koreans evade the sanctions ... in helping them launder money that they have somehow gotten or that they want to bring into the regime, or that they’ve stolen and otherwise, helping them sort of move goods,” Demers said.

“There is support through Chinese cyber infrastructure, there’s likely support in terms of sharing expertise and training from the Chinese side,” he added in the event hosted by the Center for Strategic and International Studies.

Demers said those involved in violating Chinese-backed international sanctions imposed on North Korea over its nuclear and missile programs included unscrupulous private individuals and businesses.

“But probably the biggest issue is going to be countries like China that ... don’t want North Korea to fail,” he said.

Demers added that China was playing a “balancing act” as it was also “not exactly excited about an overly aggressive North Korea” - an apparent reference to Beijing’s declared opposition to North Korea’s nuclear weapons and missile programs.

In March, the U.S. Justice Department charged two Chinese nationals with laundering more than $100 million in cryptocurrency on behalf of North Korea and detailed Pyongyang’s use of hackers to circumvent sanctions.

Demers appeared to go further in suggesting Chinese state involvement, a charge that comes at a time when the Trump administration has stepped up attacks on China in the run up the Nov. 3 U.S. presidential election.

Asked to comment, a spokesperson for the Chinese embassy in Washington said China had always been implementing U.S. resolutions on North Korea and added: “I’m not aware of the situation you mentioned.”

“The Chinese government is a staunch defender of cyber security and firmly opposes and fights all forms of cyber attacks and crimes in accordance with law.”

U.N. experts monitoring sanctions implementation said last year North Korea generated an estimated $2 billion for its weapons programs using “widespread and increasingly sophisticated” cyberattacks to steal from banks and cryptocurrency exchanges.

The experts said this year North Korea continued to carry out such attacks globally and they were investigating how Pyongyang laundered virtual assets.

Reporting by David Brunnstrom; additional reporting by Michelle Nichols in New York and Raphael Satter and Mark Hosenball in Washington; Editing by Daniel Wallis