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 Korean hacking activities. By targeting Sinbad, which allegedly processed funds from high-profile hacks, the Treasury seeks to deter similar illicit activities in the cryptocurrency space. This action underscores the government's commitment to using all available tools to combat financial crimes associated with virtual currency mixers.

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

The sanctions imposed on Sinbad are part of a broader strategy by the US Treasury, which has previously sanctioned other mixers like Tornado Cash and Blender for similar reasons. These actions highlight a pattern of targeting services that facilitate money laundering for criminal organizations, including North Korea's Lazarus Group. The Treasury's approach aims not only to penalize but also to encourage a change in behavior within the cryptocurrency ecosystem.

What specific activities led to the US Treasury sanctions on Sinbad, alleging North Korea ties?

The US Treasury's sanctions on Sinbad stem from its alleged involvement in laundering funds for the Lazarus Group, a North Korean hacking organization. Notable incidents include the hacks of Horizon Bridge, Axie Infinity's Ronin Bridge, and Atomic Wallet, which collectively resulted in losses exceeding $820 million. The Treasury's statement emphasizes that mixing services like Sinbad play a crucial role in enabling these criminal activities.

What actions have been taken against Sinbad following the US Treasury sanctions?

Following the sanctions, the US Department of Justice and other law enforcement agencies have taken control of the Sinbad website as part of their enforcement efforts. This action reflects a coordinated effort to dismantle operations that facilitate illicit financial activities linked to North Korea. The Treasury aims to send a clear message that such services will face serious consequences for their role in laundering stolen assets.

How might investors in the crypto space react to the sanctions on Sinbad?

The reaction of investors in the crypto space to the sanctions on Sinbad remains uncertain, especially given the backlash following previous sanctions like those against Tornado Cash. Some individuals have already challenged the government's authority in court, arguing that such actions overreach. As the situation unfolds, it will be crucial for investors to stay informed about regulatory developments and potential legal challenges related to these sanctions.