US Treasury Department imposes sanctions on Sinbad mixer for ties to DPRK hackers

Funds from the largest hacks of crypto projects have passed through the service

30.11.2023 - 12:26

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3 min

What’s new? The Office of Foreign Assets Control (OFAC) within the US Department of the Treasury has put Sinbad crypto mixer on the sanctions list. The main reason was that the service is actively used by the North Korean hacker group Lazarus to launder funds. Funds from the hacks on the Ronin sidechain of the Axie Infinity game, the Horizon cross-chain protocol on the Harmony network, and Atomic Wallet, among others, passed through Sinbad. The attack on Ronin remains the largest in the cryptocurrency industry, with damages totaling $625 million.

Press release

What else is known? In addition to Lazarus, Sinbad is used by sanctioned individuals, as well as drug dealers and pedophiles, OFAC emphasized. Thus, the service allows to hiding of transactions related to illegal activities, including circumventing economic restrictions and trading illegal substances and videos on the darknet.

“While we encourage responsible innovation in the digital asset ecosystem, we will not hesitate to take action against illicit actors,” the Treasury Department added.

Sinbad became the third mixer to be sanctioned by the United States: Blender.io was banned on May 6, 2022, followed by Tornado Cash on August 8. In the case of the latter, it was alleged that the laundered funds were used to finance the DPRK’s nuclear program. On April 24 this year, two over-the-counter (OTC) crypto traders who converted digital assets into fiat for North Korean hackers were also added to the sanctions list.

Notably, back in February this year, blockchain analysts at Elliptic named Sinbad as the successor to Blender.

The Treasury Department claims that Sinbad’s activities threaten national security, and therefore citizens are prohibited from interacting with it. Foreign companies face secondary sanctions for using the service.

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Earlier, the US Treasury Department called crypto mixers a threat to national security and proposed to tighten the requirements for accounting of transactions related to them. After that, the US crypto platform Swab Bitcoin announced that it would start blocking users for interacting with mixers.

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