US Accuses North Korea of Cyber Fraud, Sanctions Crypto Mixer, Blender

The United States has accused North Korea of using the virtual currency mixer, Blender.io, to support its “malicious cyber activities and money-laundering of stolen virtual currency.”

The US Department of the Treasury ("Treasury"), which announced the sanctioning of Blender on Friday, said it has added Blender to its List of Specially Designated Nationals and Blocked Persons (SDN List).

SDN is an individual, entity or organization deemed detrimental to the security of the United States.

The Treasury described Blender “as a virtual currency mixer that operates on the Bitcoin blockchain and indiscriminately facilitates illicit transactions by obfuscating their origin, destination and counterparties.”

The government department alleged that Blender was used to process over $20.5 million of the illicit proceeds generated by Lazarus Group, “a Democratic People's Republic of Korea (DPRK) cyber-hacking group” it said executed the $615 million Axie Infinity hack on the Ronin Network.

In addition, the department said Blender has helped transfer more than $500 million worth of Bitcoin since its creation in 2017.

“Today, for the first time ever, Treasury is sanctioning a virtual currency mixer,” said the Under Secretary of the Treasury for Terrorism and Financial Intelligence, Brian 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.”

A cryptocurrency mixer or tumbler is a service people use to keep their virtual currency transactions private. Tumblers achieve this by mixing potentially identifiable cryptocurrency funds with vast sums of other funds.

Implications of the Sanction

As a result of the transaction, the Treasury said US citizens are prohibited from conducting any business with Blender.

“As a result of today’s action, all property and interests in property of the entity above, Blender.io, that is in the United States or in the possession or control of US persons is blocked and must be reported to the Office of Foreign Assets Control.