- Memories of Marine Chain, an abandoned ICO from 2018, have resurfaced
- The scam was started by three North Korean intelligence operatives
- Marine Chain was one spoke in a wheel of six-figure cybercrime attacks by North Korean intelligence at the time
With the imprisonment yesterday of Ghaleb Alaumary, a money launderer who counted members of the North Korean cybercrime group Lazarus among his clients, memories of the Marine Chain have resurfaced. This scam ICO from 2018, operated by three members of North Korean intelligence, illustrates perfectly how easy it was for bad actors to illegally collect funds during the ICO hay day, and acts as a reminder that those who contributed to ICOs back then may have been doing more harm than they imagined.
Marine Chain Tried to Ride the 2018 Wave
The concept behind Marine Chain perfectly captured the ICO fever in 2018, when almost $12 billion was raised by projects looking to cash in on the billion phenomenon on the back of the 2017 boom. Marine Chain Platform Limited was one of these, registering in Hong Kong on April 12 as the “next-generation global maritime investment marketplace enabled by blockchain technology”.
Marine Chain had the perfect sales pitch for the time – vessel owners could tokenize part-ownership of their ships, allowing individuals and institutions fractional ownership of them. These offerings would be known as Vessel Token Offerings, with the whole thing taking place on the Ethereum blockchain.
The founders of Marine Chain, Kim Il, Jon Chang Hyok, and Park Jin Hyok, all from North Korea, sounded out investors in Singapore over the project before moving towards an ICO model in order to raise funds to get the platform up and running. They even applied for approval from the Securities and Futures Commission of Hong Kong to trade the Marine Chain token as a security.
North Korean Sanctions Evasion
What the trio didn’t say, however, was that they were members of North Korea’s military intelligence agency, the Reconnaissance General Bureau (RGB). They hid this fact by using false names to avoid any potential links to the DPRK and, oddly enough, had no intention of building anything like a vessel tokenization platform – every penny of the money raised through the ICO would go straight into the DPRK’s coffers as a way of avoiding U.S. sanctions.
However, it didn’t take long for suspicions to be raised by third parties. In October of 2018, just as the team was preparing to launch its ICO, the UN Panel of Experts on the Democratic People’s Republic of Korea was informed that at least one of the team behind Marine Chain was a North Korean resident. The panel launched an investigation into Marine Chain through its CEO, Singaporean national Capt. Jonathan Foong Kah Keon, who said that the project had been closed down and that his contact, the North Korean resident, had not paid his bills and had ceased contact.
Drop in the Ocean of North Korean Hacks
A further investigation by the U.S. Department of Justice, aided by the arrest of money-launderer-for-hire Ghaleb Alaumary, revealed that three North Koreans were behind the scam, which turned out to be a direct copy of an existing and legitimate vessel tokenization platform. The trio were accused of being behind the attempted theft of over $1.3 billion via a multitude of extortion plots and cyberattacks, including over $100 million in thefts from cryptocurrency companies and the Sony Pictures hack of 2014.
It is not known how much money was raised through the Marine Chain project, but it illustrated the lengths that North Korean intelligence operatives were willing to go in order to make a few dollars and snub their nose at the U.S.