"North Korea Coin": The mystery cryptocurrency caught up in a South Korean corruption scandal

Two weeks ago, South Korean authorities made a high profile arrest. The former chair of clothing manufacturer Ssangbangwool was charged with making illicit money transfers to North Korea, among other crimes. According to prosecutors, when Ssangbangwool allegedly transferred as much as  USD 8 million to North Korea in the hopes of winning future economic concessions, it acted alongside a little-known group called the Asia-Pacific Peace Interchange Association (APPIA). In 2019, that self-described grassroots promoter of inter-Korean business opportunities launched its own cryptocurrency, the APP427, which was dubbed “North Korea Coin” by the South Korean media. 

APPIA is accused of having sent USD 500,000 to North Korea in defiance of sanctions regimes. In November 2022, APPIA’s chair was arrested for his alleged involvement in illegal remittances to China and North Korea. Following the arrest, a member of parliament from the ruling conservative People Power Party (PPP) stated that money may have been “channeled into North Korea” possibly using the token. As South Korean media buzzes with speculation over whether the North Korea Coin could have been used to make the illicit payments, TRM Labs looked to on-chain activity for clues.

The Rise and Fall of North Korea Coin

APPIA reportedly launched North Korea Coin during the center-left government of former President Moon Jae-In, who promoted the idea of a future reconciliation with North Korea once it takes steps to democratize. In that climate, many South Korean businesses made active preparations for doing business with Pyongyang. 

Its ICO was a success. APPIA received 1 billion won (approximately USD 800,000) from some 100 investors, including an executive at South Korea’s national broadcaster KBS, who reportedly bought 200,000 tokens for 10 million won.

The declared purpose of North Korea Coin was to raise funds that could be invested in North Korea when UN sanctions are eventually lifted. On its website, APPIA makes several other bold claims. These included the possible use of the token in the event of a North Korean currency collapse; as a way to finance imports of North Korean beer; even as the basis for a mooted art auction system selling North Korean art as NFTs. Conventional donors to APPIA were also promised North Korea Coin.

On Chain Analysis Reveals Little Activity

In contrast to the hype that surrounded North Korea Coin’s ICO, TRM analysis shows its takeup to have been underwhelming. Since its creation in July 2019, the token has been traded only 36 times between 23 addresses. Since March 2020, North Korea Coin has seen no movement.

Many of the 23 addresses appear to have been used only for receiving and sending the token and have had no apparent exposure to exchanges or addresses with known links to North Korean entities. It has not been possible to see who controls the addresses in question. 

Whether or not the allegations of illicit fund transfers to North Korea end up being proven by prosecutors, the likelihood that North Korea Coin played a significant role in those events appears slim.

It is possible that North Korea Coin was merely a failed attempt to capitalize on the crypto boom of 2019-2021, and has now been retroactively implicated into a broader South Korean scandal that has already claimed the careers of several politicians and businesspeople close to the former administration. 

TRM Labs will continue to follow the developments of North Korea Coin as the ongoing investigation by South Korean authorities gathers pace.