North Korea is using cryptocurrency scams to bypass UN sanctions and fund its regime, report says

The price of bitcoin fell by around $1,000 in the space of 24 hours, leading a market-wide cryptocurrency crash: Getty Images/iStockphoto

North Korea is using and exploiting cryptocurrencies to bypass international regulators and help financially support its regime, a new report has revealed.

Researchers from the cyber-threat intelligence firm Recorded Future attributed two separate cryptocurrency scams in 2018 to a network of "North Korea-enablers" in Singapore, both of which were designed to con investors and funnel funds into the country.

One of the scams relates to the cryptocurrency 'hold', which was listed on and removed from a series of exchanges in 2018, before eventually rebranding to 'huzu'. The authors of the report say the cryptocurrency "left its investors high and dry."

A second scam involved a blockchain application called Marine Chain Platform and its initial coin offering (ICO) crowdfunding efforts.

"We came across discussions of Marine Chain as a cryptocurrency in a couple of bitcoin forums in August 2018," the researchers wrote in their report, titled 'Shifting patterns in internet use reveal adaptable and innovative North Korean ruling elite'.

"Marine Chain was supposedly an asset-backed cryptocurrency that enabled the tokenisation of maritime vessels for multiple users and owners."

An extensive investigation into the company and its alleged employees revealed with "high confidence" that it was in fact a scam conducted on behalf of North Korea.

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