The Office of Foreign Assets Control (OFAC) within the United States Treasury Department has enforced sanctions against Sinbad, a cryptocurrency mixer. The sanctions were imposed due to allegations that the platform played a role in laundering funds for Lazarus, a hacking group based in North Korea.
According to OFAC’s statement on November 29, Sinbad was accused of handling millions of dollars’ worth of virtual currency from Lazarus Group heists. These included various cyberattacks, such as the June 2022 breach of Horizon Bridge, the March 2022 hack of Axie Infinity’s Ronin Bridge, and the June 2023 hack of Atomic Wallet, resulting in a combined loss of approximately $820 million at that time.
Wally Adeyemo, the Treasury’s deputy secretary, emphasized, “Mixing services that enable criminal actors, such as the Lazarus Group, to launder stolen assets will face serious consequences.” He highlighted the readiness of the Treasury Department and its U.S. government partners to utilize all available tools to prevent virtual currency mixers like Sinbad from aiding illicit activities.
The Sinbad website has been seized by collaborative efforts involving the U.S. Department of Justice, the Federal Bureau of Investigation, the Netherlands’ Fiscal Information and Investigation Service and Public Prosecution Service, and Finland’s National Bureau of Investigation.
The intention behind these sanctions, as clarified by Treasury, is not to punish but to bring about a positive change in behavior. This action against Sinbad follows previous sanctions on crypto mixers like Tornado Cash and Blender, with allegations that they too facilitated fund laundering for Lazarus. There were reports from a risk management firm, Elliptic, suggesting a possible connection between Sinbad and Blender, indicating a potential rebranding effort to evade sanctions.
The impact of these sanctions on investors in the cryptocurrency realm remains uncertain. Notably, following actions taken against Tornado Cash, a group associated with crypto exchange Coinbase initiated a lawsuit against the U.S. Treasury, alleging overstepping of authority. While the initial ruling favored the Treasury after a motion for summary judgment, users lodged an appeal in November.
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