Washington: The United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) today imposed sanctions on the virtual currency mixer Blender.io (Blender), which it claimed was used by North Korea (DPRK) to support its “cyber-enabled illicit activities and money-laundering of stolen virtual currency funds”.
As a result of today’s action, all property and interests in the property of Blender.io, that is in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50 per cent or more by one or more blocked persons are also blocked.
The US claimed that in an attempt to evade “robust U.S. and UN sanctions”, the DPRK resorted to the “theft of funds” from virtual currency exchanges and blockchain-related companies to generate revenue for its unlawful weapons of mass destruction (WMD) and ballistic missile programs.
Offering details, the US Department of Treasury stated that 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.
“Blender is a platform that has enabled DPRK malicious cyber actors to mix illicit virtual currency with anonymous virtual currency to facilitate money laundering, including part of the proceeds of the nearly $620 million theft from Sky Mavis in March,” US Secretary of State Antony J. Blinken stated.
The Treasury Department further elaborated that Blender, a virtual currency mixer that operates on the Bitcoin blockchain, indiscriminately facilitated illicit transactions by obfuscating their origin, destination, and counterparties. “Blender receives a variety of transactions and mixes them together before transmitting them to their ultimate destinations. While the purported purpose is to increase privacy, mixers like Blender are commonly used by illicit actors,” it stated. It claimed that Blender had helped transfer more than $500 million worth of Bitcoin since its creation in 2017. “Blender was used in the laundering process for DPRK’s Axie Infinity heist, processing over $20.5 million in illicit proceeds,” it added.
OFAC’s investigation also identified Blender’s facilitation of money laundering for, among others, Russian-linked malign ransomware groups including Trickbot, Conti, Ryuk, Sodinokibi, and Gandcrab, the US claimed.
The Treasury Department stated it was also updating the List of Specially Designated Nationals and Blocked Persons (SDN List) to identify additional virtual currency addresses used by the Lazarus Group to launder illicit proceeds. OFAC sanctioned the Lazarus Group on September 13, 2019, and identified it as an agency, instrumentality, or controlled entity of the Government of the DPRK, based on its relationship to the U.S.- and UN-designated Reconnaissance General Bureau, the DPRK’s premiere intelligence organization, which is also involved in the conventional arms trade.
Treasury Department stated it will continue to investigate the use of mixers for illicit purposes and consider the range of authorities the Treasury has to respond to illicit financing risks in the virtual currency ecosystem.
Blinken, meanwhile, said that the United States remained committed to seeking diplomacy with the DPRK and called on the DPRK to engage in dialogue. “At the same time, we will continue to address the DPRK’s unlawful cyber activities, as well as violations of UN Security Council resolutions,” he added.
– global bihari bureau
