Evening
Yesterday, for the first time the United States Treasury Department Office of Foreign Assets Control (OFAC) sanctioned coin mixing tool Blender.io for its involvement in laundering funds for North Korean hackers.
As per press release by OFAC, Blender.io was used by North Korean hackers group Lazarus to launder $20.5 million worth of stolen crypto funds from the infamous Axie Infinity Ronin bridge hack. Axie Infinity Ronin Bridge hack was the largest in crypto history, with hackers managing to steal $620 million worth crypto. Following the exploit the hackers distributed stolen funds across various exchanges and coin mixer to launder them. OFAC has already linked the hack with North Korean hackers group Lazarus.
Coin Mixers are a privacy enhancing tools that are used to carryout transactions privately. Simply speaking all deposits go into the coin mixer, blended and withdrawn to their new destination addresses, thus breaking the link between depositor and destination addresses. Coin Mixer's transaction privacy makes them ideal for entities looking transaction privacy/anonymity like hackers.
Following the sanctions, all US properties belonging to Blender.io or in possession of US citizen will be blocked and must be reported to OFAC.
Virtual currency mixers that assist illicit transactions pose a threat to U.S. national security interests. Today, for the first time ever, Treasury is sanctioning a virtual currency mixer. […] 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.
With the crypto related exploits/hacks are rising alarmingly, crypto community and law enforcements are concerned that these hacks are somewhat organized and state sponsored. Coin Mixers like Tornado Cash or Blender.io are go to choice for malicious agents due to their transactions obfuscating properties, as evident from funds stolen in some recent crypto related hacks.
Recently popular coin mixer Tornado Cash declared that they are using Chainalysis to block the wallet addresses sanctioned by OFAC from accessing their services. But the fact remains that the underlaying code is still open sourced and besides hackers can always bypass Chainalysis by using some new wallet addresses.
Blender.io becomes the first coin mixer to get banned by OFAC, but it wont be the last as law enforcement are tightening their screws around anonymous and untraceable crypto transactions.
