US Treasury Sanctions Blender.io for helping North Korea Launder $20.5 million in Stolen Axie Crypto

Key Takeaways

  • US Treasury states that Blender.io was used by the Lazarus hacking group to launder $20.5 million worth of the cryptocurrency stolen from Axie Infinity
  • Owing to the sanction,Blender.io won’t be able to access any of its funds that were stored within the US, nor can it do transactions with American companies or citizens.
  • The Treasury alleged that Blender laundered money for ransomware organizations like Trickbot, Sodinokibi and Conti
  • Virtual Currency Mixers like Blender is commonly used by illicit actors

The U.S. Treasury Department announced on Friday(6th May) that it’s sanctioning Blender.io for allegedly “supporting North Korea’s malicious cyber activities and money-laundering of stolen virtual currency.” The Treasury’s press release states that Blender.io was used by the Lazarus hacking group to launder USD 20.5 million worth of the cryptocurrency it allegedly stole from the crypto-based game called Axie Infinity.

The entire proceeds of the hack, which the U.S. Treasury linked to Lazarus and North Korea last month, were estimated to be worth approximately USD 625 million at the time, though a few million dollars worth of funds have later been recovered. The Treasury noted that Lazarus is sponsored by the North Korean Government and that the country uses hackers to “generate revenue for its ballistic missile programs and unlawful weapons of mass destruction.”

 The U.S. Treasury’s press release noted that this is the first time it’s ever levied sanctions against a virtual currency mixer. Blender.io wasn’t the only tool the hackers used; the funds stolen from Axie Infinity’s Ronin network were originally in Ethereum and USDC and were later converted. There are also reports that the hackers stole some of the funds through Tornado Cash. The U.S. Treasury also alleges that Blender laundered money for ransomware organizations like Trickbot, Sodinokibi, and Conti. As part of the sanction, Blender also won’t be able to access any of its funds that were stored within the U.S., nor can it do transactions with American companies or citizens.

Blender.io is a virtual currency mixer that operates on the Bitcoin(BTC) blockchain and indiscriminately facilitates illicit transactions by obfuscating their destination, counterparties, and origin. While the purported purpose of Blender is to increase privacy, mixers like these are commonly used by illicit actors. The U.S. Treasury stated that it is committed to exposing components of the virtual currency ecosystem, like Blender, that are critical to the obfuscation of the trail of stolen proceeds from illicit cyber activity.

Under Secretary of the Treasury for Terrorism and Financial Intelligence, Brian E. Nelson noted, “Virtual currency mixers that assist illicit transactions pose a threat to the United States’ national security interests. We are taking strict action against illicit financial activity by the Democratic People’s Republic of Korea and will not allow state-sponsored thievery and its money-laundering enablers to go unanswered.”

Saniya Raahath
Saniya Raahath

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