Cybersecurity company Recorded Future has released a lengthy expose claiming that North Korea uses cryptocurrency to skirt U.S.-imposed economic sanctions alongside a shady network of collaborators and enablers in Singapore.
The company claims that in addition to mining coins like bitcoin and monero, North Korean leaders have also been involved in promoting cryptocurrency scams that have bilked investors around the world of millions of dollars.
North Korea’s Technology-Backed Evasion of Sanctions
North Korea’s use of cutting edge technology to get around the effects of economic sanctions imposed on Kim Jong Un’s regime is well documented. In September, CCN reported that Washington-based financial experts Lourdes Miranda and Ross Delston accused North Korea of using crypto mining and coin scams as means of generating revenue. Earlier this month, CCN also reported that a notorious North Korean hacker group called “Lazarus” is responsible for the theft of more than $571 million in cryptocurrency.
The Recorded Future report claims that North Korean leaders mine bitcoin and monero at a relatively small scale, with the bulk of their efforts in the cryptocurrency space from the first quarter of 2018 to date now focused on exploiting growing worldwide crypto awareness for the purpose of launching investment scams. Two coins in particular are identified as North Korean scam projects, namely HOLD coin and Marine Chain.
HOLD Coin, also previously known as Interstellar, HUZU and Stellar (not to be confused with XLM) used a fraudulent staking scheme to collect investor money, having been variously listed and delisted across a number of exchanges before disappearing with all funds.
Marine Chain on the other hand, was part of a more sophisticated scam that runs right to the heart of the North Korean government’s ability to consistently diminish the effectiveness of UN-imposed economic sanctions that would ordinarily cripple the regime. Billed as a tokenisation framework for maritime vessels, an investigation by Recorded Future into Marine Chain revealed a complex network linked to Singapore with potentially far-reaching implications for cybersecurity in Southeast Asia.
The Singaporean Connection
According to information gleaned from LinkedIn, an advisor called HyoMong Choi and the CEO of Marine Chain, Captain Jonathan Foong Kah Keong is the key figures in Marince Chain’s fradulent activities. Capt. Foong reportedly has connections to Singaporean companies that facilitate North Korean activities designed to circumvent U.N. sanctions. Activities these companies have been involved in include manipulating flag registries for three countries to give prohibited North Korean vessels the ability to sail under flags of convenience.
This means that more than just being a run-of-the-mill cryptocurrency scammer, Capt. Foong is actually part of the key strategy employed by the North Korean regime to skirt sanctions that should ordinarily make it the most isolated regime on earth, and keep itself in power. The appearance of Capt. Foong in the context of North Korean crypto scams is significant of a wider pivot in the regime’s criminal activities as it looks to harness the possibilities presented by a new wave of technology including blockchain technology.
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