US Imposes Sanctions on Virtual Currency Mixer Linked to North Korea-Backed Hackers
The United States has taken a significant step in cracking down on cybercriminal activity imposing sanctions on a virtual currency mixer that has been tied to North Korea-linked hackers. The Treasury Department made the announcement on Wednesday, stating that the virtual currency mixer Sinbad has processed millions of dollars worth of virtual currency from major heists carried out the North Korea-linked Lazarus Group.
Sanctions against Sinbad
The Treasury Department revealed that Sinbad processed millions of dollars worth of virtual currency from heists carried out the North Korea-linked Lazarus Group, including the Axie Infinity and Horizon Bridge heists, which amounted to hundreds of millions of dollars. Lazarus Group had previously been sanctioned the U.S. for carrying out some of the largest virtual currency heists to date.
Consequences for Criminal Actors
Deputy Treasury Secretary Wally Adeyemo emphasized the seriousness of the situation, stating, “Mixing services that enable criminal actors, such as the Lazarus Group, to launder stolen assets will face serious consequences.” He further added, “The Treasury Department and its U.S. government partners stand ready 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 the news of the sanctions, and its website displayed 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. On the other hand, North Korea’s mission to the United Nations did not immediately respond to a request for comment.
Virtual Currency Mixers and their Use
A virtual currency mixer is a software tool that pools and scrambles cryptocurrencies from thousands of addresses. Sinbad, believed to have been the successor to the Blender mixer, was used some experts in the industry and was hit with sanctions last year over accusations of being used North Korea. According to the Treasury, Sinbad is also utilized 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.
Implementation of Sanctions
The action taken on Wednesday freezes any U.S. assets of Sinbad and generally bars Americans from dealing with it. Individuals engaging in certain transactions with the mixer also risk being hit with sanctions.
The move to impose sanctions on Sinbad is a significant step in combating cybercriminal activities and preventing the exploitation of virtual currency mixers for illicit purposes. As the U.S. government continues its efforts to crackdown on such illegal activities, it remains to be seen how these sanctions will impact the broader landscape of virtual currency transactions.
I’m a cryptocurrency and blockchain technology journalist. My work has been featured in major publications such as CoinDesk, Bitcoin Magazine, and VentureBeat. I’ve been a respected voice in the cryptocurrency community and my insights into the industry have helped shape its development.
