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US sanctions imposed against “crypto mixer”

Earlier this month, the US Department of the Treasury’s Office of Foreign Assets Controls (OFAC) set a new precedent by sanctioning a virtual currency mixer for the first time.

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Published 20 May 2022

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OFAC deemed Bitcoin mixer “Blender.io” to have been culpable in assisting a North Korea backed heist, which laundered over $20.5million in illicit funds.

OFAC said that Blender.io, which operates on the Bitcoin blockchain, facilitated illicit transactions by obscuring their origin, destination and counterparties. Since its creation five years ago, it has facilitated the transfer of over $500million worth of Bitcoin.

The Lazarus Group, believed to be a North Korean cybercrime ring, used Blender.io to launder the illicit proceeds of a recent large-scale hack against Axie Infinity (a non-fungible token-based online game).

This sanction highlights how US agencies have taken a stricter approach to scrutinising the flow of funds across digital assets for signs of illicit activity. An OFAC spokesperson said, “The virtual currency mixers that assist criminals are a threat to the US national security interests.”

OFAC’s press release is available here.

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Shorter Reads

US sanctions imposed against “crypto mixer”

Earlier this month, the US Department of the Treasury’s Office of Foreign Assets Controls (OFAC) set a new precedent by sanctioning a virtual currency mixer for the first time.

Published 20 May 2022

Associated sectors / services

  • Banking & financial disputes

Authors

OFAC deemed Bitcoin mixer “Blender.io” to have been culpable in assisting a North Korea backed heist, which laundered over $20.5million in illicit funds.

OFAC said that Blender.io, which operates on the Bitcoin blockchain, facilitated illicit transactions by obscuring their origin, destination and counterparties. Since its creation five years ago, it has facilitated the transfer of over $500million worth of Bitcoin.

The Lazarus Group, believed to be a North Korean cybercrime ring, used Blender.io to launder the illicit proceeds of a recent large-scale hack against Axie Infinity (a non-fungible token-based online game).

This sanction highlights how US agencies have taken a stricter approach to scrutinising the flow of funds across digital assets for signs of illicit activity. An OFAC spokesperson said, “The virtual currency mixers that assist criminals are a threat to the US national security interests.”

OFAC’s press release is available here.

Associated sectors / services

  • Banking & financial disputes

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