The US has sanctioned a “crypto-mixing” service used in a North Korea-backed heist, in the latest sign of financial watchdogs stepping up efforts to stamp out money laundering through digital currencies.
The Treasury Department on Friday unveiled measures against Blender.io for its role in helping a North Korean-sponsored hacker group launder $20.5 million in “illegal proceeds” from one of the largest crypto heists of all time.
Friday’s announcement highlights how U.S. law enforcement agencies are scrutinizing the flow of money through digital assets more closely for signs of illegal activity. Mixers are a cause for concern as they obscure the trail of remittances that would normally be publicly available in the digital ledgers underlying cryptocurrencies.
“Virtual currency mixers that facilitate illicit transactions pose a threat to U.S. national security interests,” said Brian Nelson, the Treasury Department’s undersecretary for terrorism and financial intelligence.
US sanctions are a particularly powerful tool because of America’s central position in the global financial system. The measures implemented on Friday are intended to curb monetary transactions to and from Blender.io.
According to Treasury, Blender.io has facilitated the transfer of over $500 million worth of Bitcoin since its inception five years ago. The group “operates on the Bitcoin blockchain and indiscriminately facilitates illegal transactions by obscuring their origin, destination and counterparties.”
An email requesting a comment from Blender.io was bounced as undeliverable.
The mixer supported efforts by North Korea-backed Lazarus Group to launder proceeds from a recent hack against a crypto network used by Axie Infinity, a popular play-and-earning crypto game, Treasury said. The hacking group is accused by the US of stealing nearly $620 million in crypto assets.
Beyond North Korea, the Ministry of Finance said Blender.io facilitated money laundering activities for Russia-linked ransomware group Conti, among other things. This follows widespread concerns about the crypto industry’s role in circumventing Russian sanctions.
The sanctions against Blender.io are also indicative of the US government’s broader ambitions to crack down on illicit crypto activities.
“During [Treasury] has targeted laundry services used by hackers, ransomware operators, and other illegal actors in recent months. This is the first designation of a mixer, indicating progress in their strategy to dismantle crypto-money laundering infrastructure,” said Andrew Fierman, head of sanctions strategy at Chain Analysis.
Source: Crypto News Austria