Inside the Atomic Wallet Hack: North Korea Connection and the Sinbad.io Crypto Mixer

The world of crypto has become a hotbed for hackers and cybercriminals in recent years, and the latest victim of such crime is Atomic Wallet. The company recently suffered a hack that resulted in the loss of up to $35 million, and investigations reveal that the funds have been traced to a crypto mixer favored by North Korea’s notorious cyber-hacking group.

Background on the Atomic Wallet hack

On June 3, several user accounts belonging to Atomic Wallet were compromised, leading to losses of up to $35 million. The company’s Chief Marketing Officer, Roland Säde, assured the public that the Atomic Wallet team is doing everything possible to recover the funds and that an investigation is ongoing. Unfortunately, the latest news has revealed that the funds were traced to a crypto mixer known to be favored by the infamous North Korean Lazarus Group.

Tracing of funds to crypto mixer Sinbad.io

The blockchain compliance analytics firm Elliptic reported that its investigations team has traced the Atomic Wallet hack funds to the crypto mixer Sinbad.io. The firm did not reveal exactly how much was sent to the mixer, however, it was noted that the funds were being swapped for bitcoin before being obfuscated through the mixer.

Previous use of Sinbad.io by North Korea’s Lazarus Group

According to Elliptic, Sinbad.io has been previously used to launder over $100 million in crypto assets that were stolen by North Korea’s notorious Lazarus Group. The hacking group is responsible for several high-profile cybercrimes in recent years, including the hack of Sony Pictures in 2014 and the theft of $81 million from the Bangladesh Bank in 2016.

“Sinbad.io” is likely a rebranded version of “Blender.io”

Elliptic also reported that Sinbad.io is likely a rebranded version of Blender.io, another popular mixer used to launder funds stolen by the Lazarus Group. Blender.io was the first mixer to be sanctioned by the U.S. Treasury Department.

U.S. Treasury Department Imposes Sanctions Against Blender.io

The US Treasury Department sanctioned Blender.io in 2020, stating that the service was used to launder over $10 million in cryptocurrency stolen from two different crypto exchanges. The sanctions prohibit US individuals and businesses from conducting transactions with Blender.io.

Atomic Wallet’s response to the hack

After the hack, Atomic Wallet’s CMO, Roland Säde, assured the public that the team was doing everything possible to recover the funds. He advised victims to track the illicit transfers and report them to popular crypto exchanges to prevent the scammers from exchanging the funds.

Recommendations to victims

Unfortunately, for many victims of the hack, it may be too late to do anything to recover their lost funds. However, going forward, it is recommended that crypto users take additional steps to secure their wallets, such as enabling two-factor authentication, avoiding public Wi-Fi when accessing their wallets, and keeping their private keys offline.

Potential consequences for victims

The Atomic Wallet hack highlights the risks associated with owning and using crypto wallets. Victims of the hack may lose their investments entirely, leaving them with little to no recourse to recover their lost funds. It is essential for crypto users to exercise caution when investing in digital assets and to use secure wallets with necessary protections to avoid falling victim to cybercriminals.

The Atomic Wallet hack and the tracing of stolen funds to a crypto mixer used by the North Korean Lazarus Group are a stark reminder of the risks associated with the world of crypto. Crypto users must remain vigilant and take necessary precautions to secure their wallets and protect their investments. The Atomic Wallet team is continuing to investigate the hack and working to recover the lost funds, but for many victims, the consequences may be irreversible.

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