Report: North Korea Deepens Involvement in Cryptocurrency Scams this Year

Over the last 18 months, the internet technology company Recorded Future has released details of a number of reports into North Korea’s use of the Internet. There is evidence to show that North Korea’s leaders are technologically savvy and engage with emerging and cutting-edge technologies such as cryptocurrency.

Key Findings of the 18-month look into North Korea’s Internet Habits

  • One major goal of internet usage among North Korea’s ruling elite is to create revenue for the Kim regime.
  • Internet access is restricted to only a select few individuals among the senior leadership. No official figures have been released.
  • North Korea’s internet security has increased significantly since 2017
  • North Korea continues to move away from Western social media services and towards Chinese ones. The exception to this is LinkedIn where the report did find that North Korean leaders were consistently interacting with the social media site, but names of leaders cannot be determined.

Cryptocurrency Engagement and Cryptocurrency Scams

It was previously discovered that North Korea have been mining Bitcoin and Monero, although not on a large scale, and possibly limited to only a few machines. Their mining efforts do not appear to have increased significantly in the last year, however, their interest in alternative cryptocurrencies has.

There is evidence to suggest North Korea has become interested in a coin called Interstellar, also known as Stellar or HOLD coin, and some evidence to suggest they created it to launch a scam. Interstellar went through a staking process in which users can mine an introductory amount of coins but cannot trade them for a set period of time. This allows the digital coin to build up a value and a user base, and also allows coin developers to regulate the value of the coin by restricting which wallets can trade and when. Investors taking part in staking are putting themselves at risk of losing their investment if their trades are limited and then the value of the coin plummets, leaving them unable to trade their coins.

Interstellar was listed and delisted a number of times on different exchanges, and even went through name changes. The end result is many investors staked the coins and lost their investment. More evidence would be required to be certain of North Korea’s involvement, but it seems likely.

There was a second cryptocurrency scam uncovered called Marine Chain, operated by North Korean actors based in Singapore. Marine Chain was said to be an asset-based cryptocurrency that allowed for tokenization of maritime vessels. The website for the cryptocurrency was found to be a mirror of another site and overall a suspicious site. There have been several victims of this scam come forward on the internet citing they have lost hundreds of thousands of dollars.