1154: Sean Williams | The North Korea-China-Drug Cartel Connection
May 15, 2025
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Sean Williams, a journalist and host of the Underworld podcast, dives into the grim realities of North Korea's operation as a global crime syndicate. He discusses the regime's reliance on forced labor, human trafficking, and sophisticated cybercrime, like the notorious $1.5 billion cryptocurrency heist by the Lazarus Group. Williams also unpacks China's shadow economy, with the untraceable 'flying money' money transfer system being exploited by drug cartels. The intricate relationship between North Korea and China reveals surprising benefits for both nations amid a chaotic international landscape.
North Korea sustains its regime through organized crime, including human trafficking and drug production, highlighting its mafia-like operations.
The cult-like devotion among North Koreans to the Kim family stems from the ideology of Juche, masking the regime's oppressive reality.
Chinese money laundering practices, particularly the 'flying money' system, enable complex illicit financial transactions that evade regulation and oversight.
North Korea's sophisticated cybercrimes and partnerships with drug cartels illustrate the global impact of its organized criminal activities.
Deep dives
North Korea's Revenue Generation Tactics
North Korea sustains its regime using a variety of illicit activities, including human trafficking, drug trafficking, and cryptocurrency heists. The country faces international sanctions and struggles economically, prompting it to resort to illegal operations as a means to generate revenue. Reports indicate that the regime dispatches North Korean workers abroad, often in harsh conditions, where their wages are siphoned off to support the state. This reliance on illegal revenue streams underscores that the North Korean regime operates more like a mafia than a traditional nation-state.
The Cult of Personality in North Korea
The concept of Juche, or the self-reliance ideology promoted by the Kim family, creates a cult-like devotion among North Koreans. Citizens are indoctrinated to believe that serving the Kim family is a religious duty, overshadowing traditional concepts of faith or personal belief systems. This manipulation of public support underlies the regime's ability to maintain control over its population, even as many lives are lost due to famine and harsh labor conditions. Evidence from defectors reveals that individuals perceive loyalty to the Kims as a sacred honor, despite the dire realities they face.
Forced and Exploited Labor Abroad
North Korean citizens are often sent abroad for forced labor, with a substantial number working in logging camps in Russia and various construction sites elsewhere. These laborers are subject to abusive work conditions, earning meager pay that is largely given to the staterather than retained by the workers, whose circumstances can be tantamount to slavery. Accounts of those involved highlight the extreme dangers of their work environments, where safety standards are often ignored, and their only compensation is a fraction of the wages paid for their labor. This exploitation highlights the stark reality of North Korean citizens who are trapped by a system that prioritizes wealth for the regime over the wellbeing of its people.
The Intricacies of Money Laundering
Chinese money laundering practices, particularly those that use the 'flying money' system, exemplify the complexity of illicit financial transactions today. This method allows individuals to transfer money without physically moving it, making it difficult for authorities to trace and control. The Chinese government has adopted a hands-off approach, permitting these networks to flourish because they are integral to the economy, especially for those who have left China or are involved in illicit activities. Even with scrutiny by authorities, the systems in place allow for significant capital flight and hidden transactions that bypass formal banking channels.
Synergies Between Drug Cartels and Money Launderers
Chinese money laundering networks have established strong links with drug cartels, facilitating the flow of illicit funds through complex systems that evade formal oversight. Cartels can now leverage these Chinese networks to launder money from their drug operations, allowing them to reinvest proceeds into legitimate enterprises or personal wealth. This collaboration underscores an increased efficiency in laundering practices that has emerged in recent years, fueled by the rising prevalence of fentanyl and other drugs in the North American market. As a result, this partnership has exacerbated the drug crisis while enabling substantial illicit revenue streams for both parties.
Global Impact of North Korean Activities
North Korea's organized criminal activities have far-reaching implications beyond its borders, particularly concerning international drug trafficking and money laundering. The country has evolved its operations to include sophisticated cybercrimes, such as hacking cryptocurrency exchanges, which underscores the high stakes involved. These activities not only fund the Kim regime but also affect global markets, increasing the interconnectedness of crime across countries. This intricate web of involvement demonstrates how North Korea's illegal activities contribute to a broader landscape of transnational crime, impacting countries worldwide.
Global Response and Challenges
The international response to North Korea's illicit activities faces significant challenges, particularly in defining and prosecuting crimes related to money laundering and drug trafficking. Efforts to crack down on North Korean sanctions violations often overlook the systemic complexities of informal money transfer systems like flying money. Cooperation between countries, especially the U.S. and China, has the potential to address these concerns, but conflicting interests and corruption significantly impede collaboration. However, the evolving landscape of enforcement suggests that there may be opportunities to effectively tackle this global issue amidst ongoing complexities.
North Korea operates as a massive organized crime outfit, generating revenue through forced labor, human trafficking, drug production/trafficking, and cybercrime to fund the regime's survival.
North Korean hackers (Lazarus Group) have become sophisticated cybercriminals, stealing $1.5 billion in cryptocurrency from ByBit exchange in February 2025.
Chinese "flying money" (Fei Chen) operates as an ancient, untraceable money transfer system now widely used by drug cartels and for capital flight from China, possibly totaling $2 trillion annually.
Chinese money laundering has had a visible impact on real estate markets in Vancouver, Toronto, Sydney, and Los Angeles, where properties purchased with laundered funds remain unfinished or abandoned.
Despite public diplomatic cooperation between US and China on financial crimes, both countries have conflicting incentives — China benefits from US drug chaos while the US benefits from Chinese capital flight.
