U.S. Sanctions Virtual Currency Mixer Linked to North Korea
The United States has imposed sanctions on a virtual currency mixer that the Treasury Department said has processed millions of dollars worth of cryptocurrency from major heists carried out by North Korea-linked hackers.
Processing Millions of Dollars
The Treasury Department announced on Wednesday that virtual currency mixer Sinbad has been hit with sanctions for processing millions of dollars worth of virtual currency from heists carried out by the North Korea-linked Lazarus Group. These heists include the Axie Infinity and Horizon Bridge heists, which involved hundreds of millions of dollars.
Lazarus Group’s Criminal Activities
Lazarus Group, which has already been sanctioned by the U.S., has been accused of carrying out some of the largest virtual currency heists to date. For example, in March 2022, it allegedly stole about $620 million in virtual currency from a blockchain project linked to the online game Axie Infinity. In addition, the Federal Bureau of Investigation (FBI) stated in January that Lazarus was responsible for the theft of $100 million from U.S. crypto firm Harmony’s Horizon bridge.
Consequences for Criminal Actors
Deputy Treasury Secretary Wally Adeyemo emphasized that mixing services that enable criminal actors like the Lazarus Group to launder stolen assets will face serious consequences. He stated that the Treasury Department and its U.S. government partners are prepared to deploy all tools at their disposal to prevent virtual currency mixers, like Sinbad, from facilitating illicit activities.
Response from Sinbad and North Korea
Sinbad did not immediately respond to an emailed request for comment. However, its website displays a message indicating that the service has been seized as part of a coordinated law-enforcement action between the FBI and agencies in Finland and the Netherlands. North Korea’s mission to the United Nations also did not immediately respond to a request for comment.
Virtual Currency Mixer’s Function
A virtual currency mixer is a software tool that pools and scrambles cryptocurrencies from thousands of addresses. Sinbad is believed by some experts in the industry to be a successor to the Blender mixer, which the U.S. hit with sanctions last year over accusations it was being used by North Korea.
Sanctions and Consequences
The action on Wednesday freezes any U.S. assets of Sinbad and generally bars Americans from dealing with it. Those that engage in certain transactions with the mixer also risk being hit with sanctions. The Treasury said that Sinbad is also used by cybercriminals to obscure transactions linked to activities such as sanctions evasion, drug trafficking, and the purchase of child sexual abuse materials, among other malign activities.
The U.S. continues to take strong measures against entities involved in enabling criminal activities through virtual currency mixers, with the goal of preventing illicit activities.
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