The United States has added third-party cryptocurrency mixers to the SDN list, claiming to be used by Lazarus Group for money laundering.
The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) has imposed sanctions on cryptocurrency mixing service Sinbad, claiming that the mixing service is a money laundering conduit for notorious North Korean hackers Lazarus Group.
According to law enforcement agencies, Sinbad has been used to launder millions of dollars worth of crypto assets stolen in high-profile hacks.
Lazarus Group's preferred method for laundering stolen cryptocurrency funds is Sinbad
In a press release on November 29, 2023, OFAC claimed that Sinbad was the "preferred" currency mixing platform of North Korea's Lazarus Group, which was sanctioned in September 2019, claiming that the cryptocurrency mixing service helped handle the hacking group's transactions from various sources. Illegal proceeds from cryptocurrency theft.
According to the government agency, Sinbad laundered most of the crypto assets stolen in the Atomic Wallet, Axie Infinity, and Harmony’s Horizon Bridge hacks.
With Sinbad being added to OFAC’s latest Specially Designated Nationals (SDN) list, authorities also seized the mixing platform’s website.
Visiting this website has the following notice:
“The website was seized as part of a coordinated law enforcement action by the FBI, the Directorate of Financial Intelligence and Investigation (FIOD), and the National Bureau of Investigation targeting the Sinbad.io cryptocurrency mixing service.”
Additionally, the report claims that cybercriminals use mixers to obfuscate transactions related to drug trafficking, child sexual abuse material, and evading sanctions.
3 Crypto Mixers Now Sanctioned in the US
Meanwhile, the latest development marks the third cryptocurrency mixer sanctioned by OFAC. The agency previously took action against Blender and Tornado Cash, the latter of which had one of its co-founders, Roman Semenov, added to the SDN list.
Semenov is said to be still at large, but Tornado Cash’s other co-founder Roman Storm pleaded not guilty in September to charges including money laundering and sanctions violations after his arrest and subsequent release on bail.
Tornado Cash’s sanctions by OFAC were met with strong opposition from the crypto community, who believed the government acted beyond its authority. However, the Ethereum-based cryptocurrency mixer lost its lawsuit against the agency, seeking to dismiss the charges.
On the other hand, Blender was reportedly renamed Sinbad. Speaking about the latest sanctions, Treasury Undersecretary Wally Adeyemo said:
“Mixing services that enable criminals like the Lazarus Group to launder stolen assets will face severe consequences. The U.S. Treasury and its U.S. government partners stand ready to deploy all available tools to prevent virtual currency mixers like Sinbad from facilitating illegal activity. As we encourage responsible innovation in the digital asset ecosystem, we will not hesitate to take action against illegal actors.”
