US Treasury sanctions crypto mixer Sinbad, alleging North Korea ties

The United States Treasury Departments Office of Foreign Assets Control (OFAC) enforced sanctions on cryptocurrency mixer Sinbad, alleging the platform was accountable for laundering funds for the North Korea-based hacking group Lazarus.In a Nov. 29 statement, OFAC stated Sinbad had “processed countless dollars worth of virtual currency from Lazarus Group heists,” including the June 2022 hack of Horizon Bridge, the March 2022 hack of Axie Infinitys Ronin Bridge and the June 2023 hack of Atomic Wallet. The hacks resulted in a combined loss of approximately $820 million at the time.” Mixing services that allow criminal stars, such as the Lazarus Group, to wash stolen properties will deal with major effects,” said Wally Adeyemo, deputy secretary of the Treasury. “The Treasury Department and its U.S. government partners stand ready to release all tools at their disposal to prevent virtual currency mixers, like Sinbad, from helping with illicit activities.” Screenshot of Sinbad.io as of Nov. 29As of Nov. 29, the U.S. Department of Justice, Federal Bureau of Investigation, the Netherlands Fiscal Information and Investigation Service and Public Prosecution Service and Finlands National Bureau of Investigation had taken the Sinbad website. Treasury added that sanctions were intended “not to penalize but to produce a positive change in behavior.” OFAC has actually previously sanctioned crypto mixers, consisting of Tornado Cash and Blender, the previous of which Treasury declared likewise washed funds for Lazarus. In February, danger management company Elliptic reported that it was “extremely likely” that Sinbad and Blender were one and the same based upon on-chain habits– a rebranding possibly in an effort to prevent sanctions.Related: Blockchain Association files support in suit to raise Tornado Cash sanctionsIts unclear how financiers within the crypto space might react to the Sinbad sanctions. Following the action versus Tornado Cash, a group of people backed by crypto exchange Coinbase submitted a suit against the U.S. Treasury, claiming the federal government department exceeded its authority. A judge ruled in favor of Treasury following a movement for summary judgment, but users submitted an appeal in November. Publication: Tornado Cash 2.0: The race to build legal and safe coin mixers

Other Questions People Ask

What are the implications of US Treasury sanctions on crypto mixer Sinbad, alleging North Korea ties?

The US Treasury sanctions against crypto mixer Sinbad are significant as they aim to disrupt the laundering of funds linked to North Korea's Lazarus Group. By targeting Sinbad, the Treasury intends to deter similar illicit activities by mixing services that facilitate the washing of stolen assets. This move underscores the government's commitment to using all available tools to combat financial crimes associated with cryptocurrency.

How does the US Treasury's action against Sinbad compare to previous sanctions on crypto mixers?

The US Treasury's sanctions on Sinbad are part of a broader strategy that has previously included actions against other crypto mixers like Tornado Cash and Blender. Similar to these earlier sanctions, the Treasury's goal is to prevent these platforms from aiding in the laundering of funds for criminal organizations. The consistent targeting of such mixers highlights the ongoing challenges regulators face in managing illicit activities within the cryptocurrency space.

What specific hacks are linked to the US Treasury sanctions on Sinbad?

The US Treasury has linked Sinbad to several high-profile hacks, including the June 2022 hack of Horizon Bridge, the March 2022 hack of Axie Infinity's Ronin Bridge, and the June 2023 hack of Atomic Wallet. Collectively, these incidents resulted in losses totaling approximately $820 million. By sanctioning Sinbad, the Treasury aims to hold accountable those platforms that facilitate the movement of stolen funds from these significant cybercrimes.

What actions have been taken by law enforcement regarding Sinbad following the US Treasury sanctions?

Following the US Treasury sanctions, multiple law enforcement agencies, including the Department of Justice and the FBI, have taken action against Sinbad by seizing its website. This coordinated effort reflects a serious commitment to enforcing sanctions and curbing illicit activities associated with cryptocurrency mixers. The involvement of international partners like the Netherlands and Finland further emphasizes the global nature of this crackdown.

What is the potential impact of the US Treasury sanctions on investors in the crypto space?

The sanctions against Sinbad may create uncertainty among investors in the cryptocurrency market, particularly those who utilize mixing services. Following previous sanctions like those against Tornado Cash, there have been legal challenges questioning the authority of such actions. Investors may need to stay informed about regulatory developments and consider how these sanctions could affect their investments and strategies moving forward.