US sanctions cryptocurrency mixer Sinbad over alleged North Korea ties

WASHINGTON (Reuters) -The United States on Wednesday imposed sanctions on a virtual currency mixer the Treasury Department said has processed millions of dollars worth of cryptocurrency from major heists carried out by North Korea-linked hackers.

The Treasury Department said in a statement that virtual currency mixer Sinbad, which was hit with sanctions on Wednesday, processed millions of dollars worth of virtual currency from heists carried out by the North Korea-linked Lazarus Group, including the Axie Infinity and Horizon Bridge heists of hundreds of millions of dollars.

Lazarus, which has been sanctioned by the U.S., has been accused of carrying out some of the largest virtual currency heists to date. In March 2022, for example, it allegedly stole about $620 million in virtual currency from a blockchain project linked to the online game Axie Infinity.

The Federal Bureau of Investigation said in January that Lazarus was responsible for the theft of $100 million from U.S. crypto firm Harmony's Horizon bridge.

"Mixing services that enable criminal actors, such as the Lazarus Group, to launder stolen assets will face serious consequences," Deputy Treasury Secretary Wally Adeyemo said in the statement on Wednesday.

"The Treasury Department and its U.S. government partners stand ready to deploy all tools at their disposal to prevent virtual currency mixers, like Sinbad, from facilitating illicit activities."

Sinbad did not immediately respond to an emailed request for comment. Its website displays a message that the service has been seized as part of a coordinated law-enforcement action between the FBI and agencies in Finland and the Netherlands.

North Korea's mission to the United Nations did not immediately respond to a request for comment.

A virtual currency mixer is a software tool that pools and scrambles cryptocurrencies from thousands of addresses.

Sinbad is believed by some experts in the industry to be a successor to the Blender mixer, which the U.S. hit with sanctions last year over accusations it was being used by North Korea.

The Treasury said Sinbad is also used by cybercriminals to obscure transactions linked to activities such as sanctions evasion, drug trafficking and the purchase of child sexual abuse materials, among other malign activities.

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The action on Wednesday freezes any U.S. assets of Sinbad and generally bars Americans from dealing with it. Those that engage in certain transactions with the mixer also risk being hit with sanctions.