On Wednesday, November 29, Bitcoin mixer Sinbad was served with sanctions from the US Treasury alleging it facilitates North Korean hackers. The multi-agency team comprising the Federal Bureau of Investigation (FBI) and the Netherlands Financial Intelligence Unit (FIU) confirmed seizing the website run by the crypto mixer.
The authorities confirmed the seizure, attributing Sinbad to aiding North Korean hackers and other cybercriminals in laundering their loot and obfuscating transactions.
OFAC Alleges Sinbad Facilitated Lazarus Group in Money Laundering
The US Treasury Department’s Office of Foreign Assets Control (OFAC) confirmed enforcing the sanctions against Sinbad. OFAC profiled the Bitcoin mixer as a primary money-laundering platform for use by the Lazarus Group.
OFAC labeled Lazarus Group a prolific hacking entity working with the North Korean government. OFAC’s statement on Wednesday disclosed that Sinbad’s crypto mixer helped process million-dollar worth of crypto realized from Lazarus Group heists.
OFAC indicated that Sinbad helped process a portion of $625 million Axie Infinity and $100 million Horizon Bridge exploits in 2022.
The Treasury’s Deputy Secretary Wally Adeyemo iterated in a recent press release that crypto mixing services facilitate criminal actors, including the Lazarus Group, laundering the stolen crypto. He declared that such mixing platforms would face serious consequences that have now befell Sinbad.
US to Crack Down on Illicit Actors
Adeyemo reiterated that the Treasury Department is teaming with other authorities in readiness to deploy tools to halt virtual currency mixers, such as Sinbad, from enabling illicit activities. He stated that while the US government encourages responsible innovation within the digital asset landscape, it will not hesitate to crack down on illicit actors.
In a previous report, Cryptocurrency analyst firm Elliptic indicated that Lazarus Group leveraged Sinbad to launder crypto stolen from Atomic Wallet. The report detailed that the decentralized wallet has a customer base of 50,000 users. The wallet was exploited in mid-2023, losing $35 million to the criminal actors.
Elliptic chief scientist Tom Robinson revealed that Sinbad has been utilized in laundering Stake.com’s $41M, BadgerDAO’s $120M, CoinEx’s $70M, and FTX’s 477M.
Sinbad’s Dark Web Platform Shut Operations
The statement by OFAC coincided with Sinbad websites displaying FBI seizure notice starting on Wednesday, November 29. The seizure contrasts the clearnet label provided in February by the Sinbad founder, identified as Mehdi.
A subsequent publication by Bleeping Computer showed that Sinbad’s dark web platform shut operations. The development sees Sinbad join the growing list of crypto-mixing platforms already sanctioned by the US government. Other crypto-mixing platforms sanctioned include Blender.io and Tornado Cash.
OFAC had, in a previous statement, indicated that Tornado Cash mirrors AlphaBay in enabling users to conceal crypto funds sources when executing a transaction for a fee. The platform blends the potentially identifiable. Alternatively, it taints cryptocurrency funds by obfuscating the crypto source and destination.