[News Terms] North Korea Joseon Kwangson Bank... The Kim Family's 'Private Safe'

South Korea and US Impose Sanctions on Shim Hyun-seop of Joseon Kwangson Bank
Bank Used as 'Slush Fund Channel' Since Kim Jong-il Era
Revealed as Major Shareholder of Chinese Company Involved in North Korean Nuclear Program

South Korean and U.S. diplomatic authorities have simultaneously imposed sanctions on 'Sim Hyun-seop,' who has been backing North Korea's illegal cyber activities from behind the scenes. Sim Hyun-seop, affiliated with Chosun Kwangson Bank, is under investigation for laundering millions of dollars in illegal funds, including cryptocurrency earned by North Korean IT personnel illegally residing overseas while concealing their identities.

According to sources on North Korea on the 25th, Chosun Kwangson Bank, where Sim Hyun-seop is affiliated, has been used as a channel for slush funds and special funds since the Kim Jong-il era. It was closely managed by the Kim family to the extent that Kim Kyong-hui, Kim Jong-un's aunt, was directly in charge. Although administratively under the Chosun Trade Bank, which oversees North Korea's foreign trade and foreign exchange transactions, it is known to operate without actual control. Since North Korean residents do not use the bank or engage in foreign exchange transactions, it functioned more as a kind of 'private vault' rather than a 'bank.'

North Korea's Illegal Cyber Activities

Chosun Kwangson Bank became publicly known in March 2016 when it was designated as a target of United Nations Security Council sanctions for funding North Korea's nuclear development. It drew renewed attention in September of the same year when suspicions arose that China's Liaoning Hongxiang Group was involved in North Korea's nuclear development. It was revealed that Chosun Kwangson Bank was the second-largest shareholder of Dandong Hongxiang Industrial Logistics Co., Ltd., a subsidiary of Hongxiang Group. Although the Chinese government was suspected of backing the North Korean leadership's nuclear and missile development, the matter was concluded after China conducted a focused investigation of Hongxiang Group.

Earlier, the United States placed Chosun Kwangson Bank on its sanctions list starting in August 2009. North Korea employs tactics involving secret bank branches and shell companies worldwide, centered on Chosun Trade Bank, to conduct dollar transactions. When facing international sanctions, they attempt dollar transactions by changing signboards or using paper companies established under local names. This means that it is practically difficult for the international community's sanctions to directly cut off North Korea's funding sources.

Some analysts evaluate that this sanction could serve as a message directly targeting the Kim family while pressuring North Korea's 'major funding source'?its hacking activities. This is because the U.S. and South Korea are aware of and tracking the existence of Sim Hyun-seop, who managed Chosun Kwangson Bank's slush funds for Kim Jong-un and was responsible for laundering cryptocurrency, a key focus of North Korea. A Ministry of Foreign Affairs official explained, "South Korea and the U.S. held three rounds of working group consultations, and this measure is a close cooperation aimed at practically blocking North Korea's illegal cyber activities."

Meanwhile, South Korea's Ministry of Foreign Affairs and the U.S. Department of the Treasury simultaneously designated North Korean national 'Sim Hyun-seop' as a sanction target the day before. This is the first time in six years and four months since targeting Korea Air in December 2016 that South Korea and the U.S. have imposed sanctions on the same North Korea-related target simultaneously, and it is the first time in the cyber domain.

This content was produced with the assistance of AI translation services.