The United States Treasury Department's Office of Foreign Assets Control (OFAC) has enforced penalties on Sinbad, a cryptocurrency mixer, on allegations of money laundering for the Lazarus hacking group based in North Korea. According to the announcement on November 29, Sinbad is accused of processing millions of dollars' worth of virtual currency linked to Lazarus Group's high-profile hacks, including Horizon Bridge, Axie Infinity's Ronin Bridge, and Atomic Wallet. These hacks resulted in a collective loss of around $820 million at the time.
Wally Adeyemo, the Deputy Secretary of the Treasury, emphasized the severe consequences that mixing services enabling criminals, like Sinbad, to launder stolen assets would face. The US government, together with its partners, is fully prepared to employ all available measures to prevent virtual currency mixers from facilitating illicit activities.
Multiple agencies, such as the US Department of Justice, FBI, Netherlands' Fiscal Information and Investigation Service, Public Prosecution Service, and Finland's National Bureau of Investigation, have seized the Sinbad website. The Treasury clarified that the intention behind the sanctions is not punitive but rather to induce positive behavioral changes.
In the past, OFAC has imposed sanctions on other cryptocurrency mixers, including Tornado Cash and Blender, both accused of laundering funds for Lazarus. There were indications that Sinbad and Blender might be the same entity, given their similar on-chain behavior, suggesting a possible rebranding attempt to evade sanctions.
After the sanctions imposed on Tornado Cash, a group of individuals supported by Coinbase filed a lawsuit against the US Treasury, alleging an overreach of authority. While a judge ruled in favor of the Treasury, users filed an appeal in November.
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