U.S. Sanctions ‘Sinbad’ Crypto Mixer: North Korea’s Lazarus Group’s Key Laundering Tool Poses National Security Threat
A New Chapter in Crypto Sanctions
In a significant move by the U.S. government, the cryptocurrency Crypto Mixer Sinbad has been sanctioned, following the previous year’s crackdown on Tornado Cash. This step highlights the growing concern over the use of cryptocurrencies in illicit activities and their implications for national security.
Sinbad Under Scrutiny: Aiding North Korean Hackers
According to a report by CoinDesk, the U.S. Treasury Department recently sanctioned Sinbad, accusing it of assisting the notorious North Korean hacker group Lazarus in laundering money. The enforcement action comes as Sinbad’s website was seized by the FBI, the Dutch Financial Intelligence and Investigation Service (FIOD), the Dutch Prosecutor’s Office, and the Finnish National Bureau of Investigation.
Further reading：North Korean Hackers Unleash A New Wave of Cryptocurrency Heists: The Sinister Plot of the Lazarus Group
Understanding Crypto Mixer
Cryptocurrency Crypto Mixer, or mixers, are designed to enhance anonymity by obfuscating the traceability of transactions on the blockchain. They mix potentially identifiable cryptocurrency funds with others, making it challenging to track the origins of the funds.
The Role of Sinbad in Lazarus Group’s Operations
The U.S. Treasury Department, in its press release, identified Sinbad as a primary laundering tool for the Lazarus Group. The Office of Foreign Assets Control (OFAC) listed two Bitcoin addresses and two email addresses associated with Sinbad, prohibiting all transactions with these addresses by U.S. persons or within the global financial system.
Blockchain Data Insights: The Flow of Funds
Blockchain.com data reveals that one of the sanctioned addresses currently holds about 0.35 BTC, worth approximately $13,000. Despite the seemingly small amount, it has received over 15 BTC in total, valued at around $570,000. The other address serves as a backup, holding only $67 worth of Bitcoin.
Sinbad’s Involvement in High-Profile Hacks
The U.S. Treasury Department disclosed that the laundered funds through Sinbad were linked to high-profile hacks, including the Horizon Bridge and Axie Infinity. Moreover, it facilitated the transfer of funds derived from sanction evasions, drug trafficking, purchasing child sexual abuse materials, and illegal acquisitions on the dark web.
The Controversy of Sanctioning Mixers and Open Source Beliefs
The sanctioning of mixers like Sinbad, following the case of Tornado Cash, has sparked debate over the role of open-source software in facilitating criminal activities. The arrest of Tornado Cash developer Alexey Pertsev by Dutch authorities last year for alleged involvement in concealing criminal fund flows and promoting money laundering activities fueled discussions in the crypto community. Pertsev’s detention for nine months and upcoming trial in March next year continue to be a focal point in the debate over the ethical use of cryptocurrency technologies.
Coinbase’s Support for Tornado Cash
Coinbase’s legal team is challenging the OFAC’s sanctioning of Tornado Cash, asserting that the Treasury Department has overstepped its authority by classifying Tornado Cash as a sanctionable entity. They argue that immutable smart contracts, being open-source and non-proprietary, cannot be owned and should not be subject to property-based sanctions.
Further reading：Coinbase Employees Challenge U.S. Treasury: A Legal Battle Over Tornado Cash Sanctions
The Future of Crypto Regulation
The ongoing debates and legal challenges surrounding the sanctioning of cryptocurrency Crypto Mixer like Sinbad and Tornado Cash highlight the complexity of regulating emerging technologies. As the crypto world continues to evolve, the balance between innovation, privacy, and security remains a critical area of focus.
Further reading：Crypto Shouldn’t Be Blamed for Terror Funding: US Lawmakers Urge Biden to Review Traditional Currency Misuse
Keywords: Sinbad, Cryptocurrency Crypto Mixer, Lazarus Group, U.S. Sanctions, Tornado Cash, Money Laundering, Blockchain Technology, OFAC, Cybersecurity, North Korea, Financial Regulation
