The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) has imposed sanctions on virtual currency mixer Sinbad for its role in aiding North Korean cyber criminals, including the notorious Lazarus Group, in laundering millions of dollars. Sinbad operated on the Bitcoin blockchain and served as a preferred mixing service for North Korea’s threat actors. By indiscriminately facilitating illicit transactions and obfuscating their origin, destination, and counterparties, Sinbad enabled cybercriminals to launder their proceeds undetected.
Background on Sinbad and its operations
Sinbad, operating on the Bitcoin blockchain, had established itself as a popular choice for North Korean threat actors seeking to conceal their illicit activities. The mixing service allowed users to mix their cryptocurrency transactions, making it difficult to trace the funds. This anonymity favored cybercriminals looking to launder their illegally obtained proceeds.
Sanctions imposed on Sinbad
On November 29th, the US Department of the Treasury’s OFAC sanctioned Sinbad in response to its illicit activities. As a result, all property belonging to Sinbad in the United States, as well as any assets or interests controlled by US individuals, must be blocked and reported to the OFAC. This move aims to disrupt the flow of funds through the mixer and prevent any further facilitation of money laundering activities.
Consequences for mixing services aiding criminal actors
Deputy Secretary of the Treasury Wally Adeyemo underscored the seriousness of the consequences faced by mixing services like Sinbad that enable criminal actors to launder stolen assets. The US government is committed to holding accountable those who provide the means for cybercriminals to profit from their illicit activities.
Sinbad’s role in laundering stolen treasures
Sinbad found itself complicit in aiding the high-profile cybercriminal group Lazarus Group in laundering substantial amounts of stolen assets. Among the treasures laundered were approximately $100 million worth of cryptocurrency looted from Atomic Wallet. Sinbad played a crucial role in effectively laundering these ill-gotten gains, ensuring their movement in an untraceable manner.
Sinbad’s involvement in high-profile heists
The virtual currency mixer Sinbad did not limit its illicit activities to aiding the Lazarus Group alone. It also played a significant role in laundering the cryptocurrency obtained from prominent heists such as the Axie Infinity heist, which amounted to approximately $620 million in March 2022, as well as the Horizon Bridge heist, which involved the laundering of around $100 million in June 2022. Sinbad’s involvement in these high-profile cases further highlights the extent of its complicity in enabling cyber criminals.
Sinbad’s popularity among cybercriminals has been increasing
The popularity of Sinbad among cybercriminals is attributed to its ability to obfuscate transactions linked to various malign activities, including sanctions evasion, drug trafficking, the purchase of child sexual abuse materials, and the sale of illicit goods on darknet marketplaces. The virtual currency mixer provides a convenient and seemingly anonymous method for criminals to launder their proceeds, shielding their identities and avoiding detection by authorities.
Executive order and national security implications
The US government’s imposition of sanctions on Sinbad stems from its material support of cyber activities and its provision of technological assistance to individuals deemed a significant threat to US national security. Sinbad’s ability to help cybercriminals launder funds directly contributes to the financing of unlawful weapons of mass destruction and ballistic missile programs, which pose a grave threat to global security.
The connection between cybercrime and the revenue source of the DPRK is significant
The Democratic People’s Republic of Korea (DPRK) has turned to cybercrime as a revenue source for its unlawful weapons programs. The regime utilizes illicit activities, including hacking, to generate funds necessary for the development and maintenance of its weapons of mass destruction and ballistic missile programs. By cracking down on services like Sinbad, the international community seeks to disrupt the flow of funds that bolster these dangerous activities.
The US government’s decision to impose sanctions on the virtual currency mixer Sinbad serves as a significant step in combating the facilitation of criminal activities by enabling anonymous money laundering. Sinbad’s involvement in aiding North Korean cybercriminals, particularly the Lazarus Group, highlights the dire need for stronger measures to counter cybercrime and safeguard global security. International cooperation and enforcement efforts are crucial to dismantle the infrastructure that supports cybercriminal networks and their illicit financial activities.