The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) recently announced sanctions against the cryptocurrency mixing service Sinbad in response to evidence linking it to enabling money laundering for the North Korea-based hacking group Lazarus.
Investigations have connected Sinbad to laundering potentially hundreds of millions of dollars stolen in major cryptocurrency heists such as the 2022 Horizon Bridge and Axie Infinity’s Ronin Bridge hacks. The sanctions underscore the government’s resolve to crack down on the use of cryptocurrency mixers like Sinbad to facilitate criminal activities by groups like Lazarus.
According to the Treasury, the seizures undertaken domestically and internationally with cooperation from agencies in the Netherlands and Finland represent a united global front against the growing threat of cybercrime exploiting cryptocurrencies. The department framed the sanctions as an attempt to change behavior rather than purely punish.
This continues OFAC’s previous pattern of sanctioning cryptocurrency mixers accused of enabling money laundering, like Tornado Cash and Blender. The latter was also linked to Lazarus, while risk management firm Elliptic reported a possible connection between Sinbad and Blender, suggesting Sinbad may be a rebranding effort to avoid sanctions.|
The sanctions have precedent for spurring legal challenges over potential overreach, as with the lawsuit against OFAC by a group backed by crypto exchange oinbase">Coinbase over its sanctions against Tornado Cash. The outcome of the Sinbad sanctions on the broader crypto market and community debates around privacy versus security remains to be seen.
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