The Office of Foreign Assets Control (OFAC) of the US Treasury Department announced sanctions against cryptocurrency mixer Sinbad in a major action against cybercrime. This action is in response to claims that Sinbad helped the North Korean hacker group Lazarus launder money.
Linking Sinbad to Significant Crypto Heists
Sanctions against Sinbad by the OFAC come after investigations reveal that the platform was involved in the laundering of millions of dollars from well-known cryptocurrency thefts. These thefts consist of the hacks of the Horizon Bridge in June 2022, the Ronin Bridge of Axie Infinity in March 2022, and the Atomic Wallet in June 2023. The total damages resulting from these assaults come to about $820 million.
Deputy Secretary of the Treasury Wally Adeyemo underlined the government’s resolve to stop criminal activity centered around cryptocurrency. He warned that using services like Sinbad, which help organizations like Lazarus launder money, will have dire consequences. The Treasury Department is actively attempting to stop these platforms from supporting illegal activity, as are other domestic and foreign law enforcement organizations.
The seizures carried out by the Federal Bureau of Investigation, the U.S. Department of Justice, and foreign organizations from Finland and the Netherlands highlight a concerted worldwide effort to combat cybercrime in the cryptocurrency space. Treasury made it clear that rather than being punitive in nature, the sanctions promote positive behavioral change.
Legal Conflicts After Sanctions on Crypto Mixers
Cryptocurrency mixers have been sanctioned by OFAC previously. Similar actions have already been taken against platforms like Blender and Tornado Cash. Interestingly, Blender was also charged with money laundering on behalf of the Lazarus Group. Elliptic, a risk management company, revealed a likely connection between Blender and Sinbad and proposed a potential rebranding to get around sanctions.
In response to Tornado Cash’s sanctions, the cryptocurrency community sued the US government.Treasury by an organization backed by cryptocurrency exchange Coinbase. They claimed the government department had overreached itself. A judge did, however, rule in favor of the Treasury, and the decision is presently being appealed.
It is unclear how the US Treasury’s sanctions against Sinbad will affect investor sentiment and the larger cryptocurrency market. Previous penalties have resulted in legal disputes and discussions about regulatory overreach, privacy vs security, and other issues within the cryptocurrency community.
