U.S. Treasury’s Office of Foreign Assets Control Sanctions Cryptocurrency Mixer Sinbad.io
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced sanctions on the cryptocurrency mixer Sinbad.io, also known as Sinbad, on Wednesday. The mixer, used by the North Korean hacker organization Lazarus Group, was found to be involved in laundering hundreds of millions of dollars connected to high-profile hacks executed by the group.
Sinbad.io and Its Role in Money Laundering
Sinbad.io was heavily utilized by Lazarus Group to obscure the origin and destination of blockchain transactions, making it difficult to trace the flow of funds. According to OFAC, some of the transactions facilitated by Sinbad were tied to sanctions evasion, drug trafficking, and the purchase of child sexual abuse materials.
The mixer was instrumental in laundering stolen assets, with one attack alone on the Axie Infinity game netting about $620 million in March 2022. OFAC’s statement highlighted the critical role of mixing services in enabling criminal actors to launder illicit assets, and emphasized that such services would face serious consequences.
Sanctions and Consequences
As a result of the sanctions, it is now illegal for U.S. citizens to use Sinbad.io, and all property tied to the mixer must be reported to OFAC. Individuals still engaging in certain transactions with Sinbad.io could also face sanctions. Deputy Secretary of the Treasury Wally Adeyemo emphasized the seriousness of the issue, stating that mixing services involved in enabling criminal actors to launder stolen assets will face serious consequences.
Previous Sanctions on Cryptocurrency Mixers
Sinbad.io joins Blender.io and Tornado Cash as mixers that have been sanctioned by the U.S. over the past 18 months. The sanctioning of Tornado Cash last year drew the ire of many within the crypto industry, who claimed that the government was infringing on crypto users‘ right to privacy. The U.S. Treasury, however, remains committed to taking action against illicit actors, while still encouraging responsible innovation in the digital asset ecosystem.
The sanctioning of Sinbad.io by the U.S. Department of the Treasury’s Office of Foreign Assets Control underscores the government’s determination to crack down on illicit activities in the cryptocurrency space. As the use of cryptocurrency mixers to launder stolen assets continues to be a concern, regulatory authorities are likely to continue taking strong measures to combat such practices.
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