The US Treasury has sanctioned the first cryptocurrency mixer

The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury has announced its first-ever penalties against a crypto mixer. According to the Treasury Department, Lazarus Group used the mixing service to process criminal earnings from the $620 million crypto theft of the online game Axie Infinity.

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Sanctions by Treasury Department Mixer of Cryptocurrencies

The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury stated on Friday that cryptocurrency mixer Blender.io has been sanctioned (Blender). The Democratic People's Republic of Korea (DPRK) uses this mixing service, according to the OFAC, "to promote its destructive cyber activities and money-laundering of stolen virtual currency."

According to the release, on March 23, the Lazarus Gang, a North Korean state-sponsored cyber hacking group, carried out the world's greatest cryptocurrency robbery to date, stealing about $620 million from a blockchain project tied to the online game Axie Infinity. The OFAC further stated:

"Over $20.5 million in criminal revenues were processed using Blender."

On September 13, 2019, the OFAC sanctioned the Lazarus Group, identifying it as a "government of the DPRK agency, instrumentality, or controlled entity," according to the notice. The group's "connection to the US- and UN-designated Reconnaissance General Bureau, the DPRK's primary intelligence outfit" led to the designation.

Brian E. Nelson, Under Secretary of the Treasury for Terrorism and Financial Intelligence, said:

"Today, Treasury is sanctioning a virtual currency mixer for the first time ever."

Blender also facilitated money laundering for Russian-linked ransomware gangs such as Trickbot, Conti, Ryuk, Sodinokibi, and Gandcrab, according to the OFAC investigation.

The US Treasury Department clarified the situation:

"While most virtual currency activity is legal, mixers, peer-to-peer exchangers, darknet markets, and exchanges can be utilized for illegal behavior, including sanctions evasion."

The Treasury stated, "This includes the facilitation of heists, ransomware scams, and other cybercrimes."

According to the notice, all Blender.io property and interests in property in the United States, or in the ownership or control of U.S. individuals, are blocked and must be reported to the OFAC. Furthermore, any entities held 50% or more by one or more blocked persons are also blocked, as are all transactions involving designated or blocked persons by US persons or within the US.