Mixers, or platforms that seek to cover the tracks of crypto movement, are making news again as the US Department of Treasury, Office of Foreign Assets Control (OFAC), has sanctioned Sinbad.io (Sinbad) for helping North Korea (the Democratic People’s Republic of Korea (DPRK)) in its nefarious activities. OFAC states that Sinbad is a key money-laundering tool of the Lazarus Group, a state-sponsored cyber hacking entity.
In 2022, OFAC sanctioned Blender.io, the first-ever designation of a crypto mixer, and later that year “redesignated” Tornado Cash. In April of 2023, OFAC sanctioned two over-the-counter virtual currency traders who facilitated the conversion of stolen virtual currency to fiat currency for DPRK actors working with the Lazarus Group.
Reportedly, Sinbad has processed millions of dollars in digital assets, including thefts from the Horizon Bridge and Axie Infinity. Treasury also claims that Sinbad has helped to obfuscate transactions engaged in drug trafficking, child sex abuse, sanctions evasion, and other sales on the darknet.
Deputy Secretary of the Treasury Wally Adeyemo said that mixers will face serious consequences for enabling criminal activity.
“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. While we encourage responsible innovation in the digital asset ecosystem, we will not hesitate to take action against illicit actors,” said Adeyemo.
Treasury reports that Sinbad was used to launder a significant portion of the $100 million worth of crypto y stolen on June 3, 2023, from customers of Atomic Wallet. Sinbad was also used to launder a significant portion of crypto from the Axie Infinity hack of approximately $620 million in March 2022 and the Horizon Bridge theft of approximately $100 million in June 2022.
The Lazarus Group has operated for more than ten years and is said to have stolen over $2 billion worth of digital assets.