North Korea Allegedly Behind 2 Fraudulent Crypto Projects

A new report claims that North Korea's leadership has sponsored two scam coins in 2018, Stellar Holdings (HOLD), also known as HUZU, Interstellar or Stellar and Marine Chain.

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North Korea’s involvement in cryptocurrency isn’t a new thing, especially since being discovered that high-ranking officials have been secretly mining both Bitcoin (BTC) and privacy-focused coin Monero (XMR).

However, a new report claims that the country’s leadership has sponsored two scam coins in 2018. The first, Stellar Holdings (HOLD), also known as HUZU, Interstellar or Stellar – this is not Stellar Lumens (XLM). The second being Marine Chain, which was deemed fraudulent by the province of Ontario in Canada.

Recorded Future report

The U.S.-based security platform Recorded Future has released details of how the North Korean government has sought to benefit from two altcoin scams, in a report titled Shifting Patterns in Internet Use Reveal Adaptable and Innovative North Korean Ruling Elite.

According to the report, the firm’s research team Insikt Group has established that the country has “exploited cryptocurrencies, and asset-backed “altcoins,” and that there are at least two cryptocurrency coins the state-sponsored that have turned out to be fraudulent.

Stellar Holdings (HOLD) aka Interstellar aka HUZU

A crypto asset known as Stellar Holdings (HOLD) is allegedly one of two scam coins that North Korea has sponsored this year, discovered to be a scam around June.

Insikt Group writes that Stellar Holdings has been rebranded several times, adopting a number of names that might have confused an unsuspecting investor. Over much of 2018, the coin has been renamed to Stellar, HOLD, and most recently HUZU.

Those unaware may confuse “stellar” in this case with the Stellar Lumens (XLM), a top ten digital asset traded on multiple exchanges around the world.

Recorded Future has stated that a succession of exchanges listed and then delisted HOLD coin between March and August this year. In that period, the token underwent rebranding and became HUZU coin, before defrauding investors in an exit scam.

The unfortunate victims of the scam fell for its staking ploy, eventually losing all their funds.

Marine Coin

Another scam coin sponsored by the North Koreans is a coin known as Marine Chain. Researchers say they were alerted to the possibility of the project being a scam from complaints made in a “couple of Bitcoin forums early last August.

Marine Chain, purportedly an asset-backed crypto that allowed for the tokenization of maritime vessels, turned out to have been a big scam. The state of Ontario, Canada was among the first to declare the crypto fraudulent.

There have been numerous complaints about the Marine Chain platform, with victims revealing the loss of thousands of dollars in the scam. As well as that scam, the platform’s website carried other scams that defrauded users.

Since being registered, the coin’s website reportedly moved from one IP address to another, ending up at four different IP addresses. It has also been noted that Marine Chain’s website marine-chain.io bore an uncanny resemblance to another site, almost a split mirror image of shipowner.io.

A wider network of “enablers”

The report further notes that the scams are a part of a wider “network of enablers” for the Pyongyang leadership. However, it is the first time that the vast network has used cryptocurrency to raise funds for the North Korean government.

North Korea sponsored hacker group Lazarus has been linked to several cyber attacks on exchanges around the world. Earlier in the year, Recorded Future pointed out the cybercrime group might have been involved in the hack on crypto exchange Bithumb.

Another security team, Group-IB published a report this past week, stating that Lazarus had stolen about $571 million in crypto assets since early 2017, most of it in 2018.

Among the exchanges hacked by the North Korea affiliated group are Japan-based Coincheck and South Korea’s Bithumb, the report said.

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