The U.S. Department of the Treasury announced sanctions today against the cryptocurrency mixing service Sinbad.io (Sinbad). The sanctions are based on its alleged involvement in laundering hundreds of millions of dollars in crypto stolen by the North Korean state-sponsored Lazarus Group.
Crypto mixers or tumblers are designed to obscure the origin and destination of digital currency transactions, effectively laundering the funds. In addition, per the Treasury Department, Sinbad has allegedly processed substantial sums from major Lazarus Group heists.
- The Treasury Department’s Office of Foreign Assets Control (OFAC) designated Sinbad as having provided support for Lazarus Group.
- Sinbad allegedly laundered portions of the $620 million Axie Infinity hack in March 2022 and the $100 million Horizon Bridge hack in June 2022.
- The service has purportedly washed millions in illicit proceeds overall, including those linked to drug trafficking, child exploitation material trading, and darknet market transactions.
- The move follows OFAC sanctions against two other crypto mixers—Blender.io and Tornado Cash—which were also said to have connections to Lazarus Group.
North Korea has grown increasingly reliant on hacking
North Korea has grown increasingly reliant on hacking and cyber theft to generate revenue amid intense economic sanctions. The country often employs the Lazarus Group to perpetrate complex heists and launder infrastructure to obfuscate the activity.
According to OFAC, Sinbad’s operational similarities to Blender.io suggest it emerged as a sanctions evasion replacement after that mixer was sanctioned. In addition, the Treasury Department says it will continue targeting enablers of North Korean cybercrime and sanctions avoidance.
All U.S. individuals and entities are now prohibited from interacting with Sinbad.io under threat of civil and criminal penalties. The mixer’s remaining assets in the country have been frozen. Furthermore, the sanctions represent the latest effort to combat North Korean cyber operations intended to bypass economic restrictions.