Last year, US officials sanctioned another virtual currency mixer called Blender.io (Representational).

Washington:

The United States on Wednesday sanctioned a crypto mixer that was allegedly used as a money laundering tool by hackers linked to the North Korean government.

Crypto mixers are software that allows users to disguise transactions and have been used by hackers to convert crypto into fiat currency.

The U.S. Treasury Department said in a statement that its lawsuit against Sinbad.io comes because the mixer processed “millions of dollars worth of virtual currency” from heists by a sanctioned hacking group.

“Mixing services that allow criminal actors like the Lazarus Group to launder stolen assets will have serious consequences,” Deputy Treasury Secretary Wally Adeyemo said in a statement, referring to the hacking organization.

“As we promote responsible innovation in the digital asset ecosystem, we will not hesitate to take action against illicit actors,” Adeyemo added.

State Department spokesman Matthew Miller said Pyongyang’s “aggressive cyber-theft campaign” had been criticized by experts for its role in raising funds for North Korea’s “illegal weapons of mass destruction and ballistic missile programs.”

Last year, US officials sanctioned another virtual currency mixer called Blender.io, which was also accused of providing services to the Lazarus Group.

The Treasury Department said Wednesday that Sinbad is viewed by some industry experts as the successor to Blender.io.

According to the Treasury Department, Sinbad was used to launder a “significant portion” of $100 million worth of virtual currency stolen from Atomic Wallet customers in June.

It added that the tool was also used to launder some of the virtual currency from another heist worth around $620 million in March last year.

In a separate statement released on Wednesday, Adeyemo is expected to tell a summit in Washington that the lack of action by too many crypto firms to prevent misuse of digital assets “poses a clear and present risk to our national security.”

In prepared remarks to the Blockchain Association Policy Summit, he warned that authorities will hold illegal actors accountable.

Last week, U.S. officials announced a deal that would see cryptocurrency exchange Binance pay over $4 billion in penalties while its chief executive Changpeng Zhao resigned and pleaded guilty to money laundering violations.

Adeyemo said Binance “has allowed it to be abused by perpetrators of child sexual abuse, illegal drug trafficking and terrorism.”

He added that the government’s challenge goes beyond cryptocurrency exchanges and also extends to other parts of the digital asset ecosystem such as Sinbad.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

Source : www.ndtv.com

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