The U.S. Treasury Department has sanctioned the cryptocurrency mixing service Sinbad.io (Sinbad) for its role in enabling money laundering by North Korean state-sponsored hacking groups.
The Office of Foreign Assets Control (OFAC) of the U.S. Department of Treasury has imposed sanctions on Sinbad, a cryptocurrency mixing service purportedly used by criminals, such as North Korea’s Lazarus Group, to launder money using digital assets.
According to a statement released on November 29, Sinbad’s platform was utilized to channel hundreds of millions of dollars in cryptocurrency that had been taken from the biggest vulnerabilities in the industry, including the $600 million Axie Infinity Ronin Bridge hack, the $100 billion Atomic Wallet breach, and the $100 million loss at Harmony Horizon.
The FBI, the Dutch Financial Intelligence and Investigation Service, and the Finnish National Bureau of Investigation worked together to take down Sinbad’s website as a result of OFAC sanctions. Wally Adeyemo, Deputy Secretary of the Treasury stated:
“Mixing services that enable criminal actors, such as the Lazarus Group, to launder stolen assets will face serious consequences.”
Restrictions on Sinbad comes after enforcement moves against other cryptocurrency mixers, such as Tornado Cash on November 8, 2022, and Blender.io on May 6, 2022.
Roman Storm, Roman Semenov, and Alexey Pertsev, the developers of Tornado Cash, were also parties to the lawsuit. Litigation against the three co-founders is pending in the Netherlands and the United States.
Crypto mixers have also come under scrutiny from Treasury departments, including the Financial Crimes Enforcement Network, which has dubbed them a “national security threat” and called for stricter regulations regarding platform monitoring.
This restricts extensive regulatory measures taken by the U.S. government against what watchdogs term non-compliant crypto actors who have inadequate policies to stop the improper use of their technology.
