U.S. Department of Treasury Issues THE FIRST EVER Sanction On A Cryptocurrency Service

May 7, 2022 9:24 pm Comments

The U.S. Department of Treasury just made history.

The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury has levied its first-ever penalties against a cryptocurrency mixer called Blender.io.

According to the Treasury Department, the Lazarus Organization used the mixing service to process illicit earnings from the $620 million crypto theft of the online game Axie Infinity, which occurred in 2014.

Blednder.io would Blender reportedly “facilitates illegal transactions by muddling their origin, destination, and counterparties”.

Crypto.News had more on the story:

Today, the U.S. Department of the Treasury has issued the first-ever sanction on a cryptocurrency service. The department said it had added the virtual currency mixer Blender.io (Blender) to the List of Specially Designated Nationals and Blocked Persons (SDN List).

Blender is a digital currency mixer operating on the Bitcoin (BTC) blockchain that facilitates illegal transactions by muddling their origin, destination, and counterparties. The service receives an assortment of transactions, mixes them up, and then transmits them to their final destinations. Mixers are mainly used to increase transactional privacy, but platforms like Blender have become favored tools for bad-faith actors to obscure their financial footprints.

Since it was created in 2017, the platform has facilitated the transfer of more than half a billion dollars’ worth of BTC. According to Treasury, Blender.io was used by the Democratic People’s Republic of Korea (DPRK) to support nefarious cyber activities and launder stolen crypto.

The Office of Asset Control (OFAC), which is responsible for the SDN List, stated that an outfit known as the Lazarus Group carried out the largest crypto heist in history when it made off with nearly $620 million from the Ronin network, a blockchain affiliated to the popular play-to-earn (P2E) game Axie Infinity.

The Lazarus Group, identified as a front for the North Korean intelligence agency, had already been sanctioned by OFAC in 2019.

The U.S. Department of Treasury released these details:

Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned virtual currency mixer Blender.io (Blender), which is used by the Democratic People’s Republic of Korea (DPRK) to support its malicious cyber activities and money-laundering of stolen virtual currency. On March 23, 2022, Lazarus Group, a DPRK state-sponsored cyber hacking group, carried out the largest virtual currency heist to date, worth almost $620 million, from a blockchain project linked to the online game Axie Infinity; Blender was used in processing over $20.5 million of the illicit proceeds. Under the pressure of robust U.S. and UN sanctions, the DPRK has resorted to illicit activities, including cyber-enabled heists from cryptocurrency exchanges and financial institutions, to generate revenue for its unlawful weapons of mass destruction (WMD) and ballistic missile programs.

“Today, for the first time ever, Treasury is sanctioning a virtual currency mixer,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson. “Virtual currency mixers that assist illicit transactions pose a threat to U.S. national security interests. 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.”

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