The United States on Wednesday imposed sanctions on a crypto-miner that it said served as a money-laundering tool for hackers linked to the North Korean government.
Crypto mixers are software that allow users to disguise transactions and have been used by hackers in attempts to convert crypto into traditional currency.
The US Treasury Department said in a statement that its action against Sinbad.io comes as the mixer has processed millions of dollars in virtual currency from heists carried out by a sanctioned hacker group.
“Interfering with services that allow criminals like the Lazarus Group to launder stolen assets will face serious consequences,” Deputy Finance Minister Wally Adeyemo said, referring to the hacking group.
“While we encourage responsible innovation in the digital asset ecosystem, we will not hesitate to take action against illegal actors,” Adeyemo added.
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State Department spokesman Matthew Miller said Pyongyang’s “aggressive cyber theft campaign” has been pointed out by experts for its role in generating funds for North Korea’s nuclear and ballistic missile programs.
Last year, US officials imposed sanctions against another virtual currency mixer, Blender.io, which is also responsible for providing services to the Lazarus Group.
The Treasury Department said on Wednesday that Sinbad is believed by some experts to be a successor to Blender.io.
Sinbad was used to launder a “significant portion” of $100 million worth of virtual currency stolen in June from Atomic Wallet customers, the Treasury Department said.
He added that the tool was also used to launder some of the virtual currency from another heist of about $620 million last year.
Clear danger
In separate statements released on Wednesday, Adeyemo was expected to tell a summit in Washington that inaction by too many crypto companies to prevent misuse of digital assets “represents a clear and present risk to our national security.”
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In prepared remarks at the Blockchain Association Policy Summit, he added that the Treasury Department is asking Congress to consider reforms that would expand its tools to go after illegal actors in the digital asset space.
“We call on Congress to create a secondary sanctions regime that would not only cut a company out of the US financial system, but also expose any company that continues to do business with the sanctioned entity,” the statements said. .
Last week, US officials announced a deal under which cryptocurrency exchange Binance will pay more than $4 billion in penalties, while its CEO Changpeng Zhao resigned and pleaded guilty to money laundering violations.
Adeyemo said the government’s challenge goes beyond cryptocurrency exchanges.
Source: AFP