The U.S. Treasury Department's Office of Foreign Assets Control (OFAC) has imposed sanctions on the cryptocurrency mixer Sinbad, alleging its involvement in laundering money for the North Korean hacking group Lazarus.
In a recent advisory on November 29, OFAC accused Sinbad of processing millions of dollars in virtual currency related to Lazarus Group thefts, including incidents such as the Horizon Bridge hack in June 2022, the Axie Infinity’s Ronin Bridge hack in March, and the Atomic Wallet hack in June 2023, resulting in a combined loss of around $820 million.
Treasury Undersecretary Wally Adeyemo emphasized that service providers enabling criminals, like the Lazarus Group, to launder stolen assets will face severe consequences. He added that the U.S. Treasury, along with its government counterparts, stands prepared to utilize all available measures to prevent virtual currency mixers, such as Sinbad, from facilitating illegal activities.
As of November 29, the U.S. Department of Justice, the FBI, and other international law enforcement agencies have taken action to block the Sinbad website. The Treasury clarified that the purpose behind sanctions is not punitive but rather aimed at encouraging positive behavioral changes.
OFAC has previously targeted cryptocurrency mixers, including Tornado Cash and Blender, alleging their involvement in money laundering activities for Lazarus. Earlier in February, risk management firm Elliptic suggested that based on on-chain behavior, Sinbad and Blender might be connected, hinting at a potential rebranding strategy to circumvent sanctions.
The impact of the Sinbad sanctions on investors within the cryptocurrency realm remains uncertain. Following the measures against Tornado Cash, a group associated with cryptocurrency exchange Coinbase filed a lawsuit against the U.S. Treasury, claiming the agency overstepped its jurisdiction. While a judge initially ruled in favor of the Treasury, users appealed the decision in November after a summary judgment motion was filed.
