Key takeaways:
- Sinbad’s website was seized in a joint operation by the FBI and Dutch Financial Intelligence.
- The U.S. Treasury blocks a crypto mixer, citing ties to North Korea’s hacking group.
In a significant move against illicit activities in the crypto space, the U.S. Treasury Department has taken action to block Sinbad.io, a cryptocurrency mixing service, from the global dollar financial system.
The seizure of Sinbad’s website was executed in collaboration with the FBI, Dutch Financial Intelligence and Investigation Service (FIOD), Openbaar Ministerie (the Netherlands’ public prosecutor’s office), and Finnish National Bureau of Investigation.
Sinbad.io, created by an anonymous founder, gained notoriety as a preferred choice for North Korean-state sponsored hacking organization Lazarus in 2022, according to reports from analytics firm Chainalysis and researchers from Elliptic.
The service was flagged as a potential relaunch of Blender, a mixer that was blacklisted by the Office of Foreign Assets Control (OFAC) in 2022.
The U.S. government’s move to seize Sinbad’s website on Wednesday underscores the increasing importance of cracking down on cryptocurrency mixing services that facilitate criminal activities, particularly in organized crime. Dutch investigative agencies like the FIOD are actively pursuing such services hosted on servers in the Netherlands.
The U.S. Treasury Department stated that Sinbad.io had processed millions of dollars’ worth of virtual currency linked to heists conducted by the sanctioned hacking group, Lazarus. Deputy Treasury Secretary Wally Adeyemo emphasized the serious consequences for mixing services enabling criminal actors to launder stolen assets.
While advocating for responsible innovation in the digital asset ecosystem, Adeyemo stressed the government’s commitment to taking action against illicit actors. This follows the previous sanctioning of another virtual currency mixer, Blender.io, charged with providing services to the Lazarus Group.
The Treasury’s OFAC has designated two Bitcoin addresses and two email addresses associated with Sinbad, prohibiting all U.S. persons and anyone interacting with the global financial system from engaging with these addresses. One of the addresses currently holds approximately 0.35 BTC, while the other, designated as an alternate, holds around $67 worth of bitcoin.
Sinbad.io was implicated in laundering a significant portion of the $100 million worth of virtual currency stolen in June from customers of Atomic Wallet. Additionally, the mixer played a role in laundering funds from the $620 million Axie Infinity heist and other activities such as sanctions evasion, drug trafficking, and illicit sales on darknet marketplaces.
The Treasury’s actions against Sinbad.io serve as a stern warning to virtual currency mixers facilitating illicit activities, reinforcing the government’s commitment to preventing such platforms from aiding criminal enterprises. The move aligns with ongoing efforts to combat cybercrime and uphold the integrity of the global financial system in the face of evolving threats in the digital landscape.
