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Cryptocurrency service hit with sanctions

by Tory Newmyer The Washington Post | May 7, 2022 at 1:41 a.m.

WASHINGTON -- The Treasury Department on Friday issued its first-ever sanctions against a cryptocurrency "mixer," a service that pools digital assets to obscure their owners, as it continues its pursuit of more than $600 million that North Korean hackers stole from the Axie Infinity video game.

The move targets a mixer called Blender.io. The hackers have used it to process more than $20.5 million of their haul since their March attack on the game, Treasury said.

The cybercriminal gang -- known as the Lazarus Group, which U.N. investigators have said is a key funding source for North Korea's weapons programs -- had laundered nearly $100 million as of late last month, The Post reported, citing data from blockchain analytics firm Elliptic.

Using another mixer called Tornado Cash, the hackers continued to process batches of their stolen crypto even after it was known they were the thieves, highlighting the challenge U.S. authorities confront in keeping pace with cybercriminals rapidly moving millions of dollars across the globe with mere keystrokes.

"Virtual currency mixers that assist illicit transactions pose a threat to U.S. national security interests," Brian Nelson, Treasury undersecretary for terrorism and financial intelligence, said in a statement. "We are taking action against illicit financial activity by the DPRK and will not allow state-sponsored thievery and its money-laundering enablers to go unanswered."

It was not clear why the Treasury Department only designated Blender.io. A department spokesperson did not immediately return a request for comment.

The Treasury Department noted in its announcement that while most crypto activity is legal, "it can be used for illicit activity, including sanctions evasion, through mixers, peer-to-peer exchangers, dark net markets, and exchanges. This includes the facilitation of heists, ransomware schemes, and other cybercrimes."

The department called mixers that assist criminals "a threat to U.S. national security interests" and said it would continue to investigate them and "consider the range of authorities" it has to respond. "Criminals have increased use of anonymity-enhancing technologies, including mixers, to help hide the movement or origin of funds," the announcement said.

Print Headline: Cryptocurrency service hit with sanctions

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