Earlier this year, news broke that a separate app called Blender Sinbad, a federally-approved coin blender, had launched.
Now the feds have gone after the controversial successor.
The US Treasury's Office of Foreign Assets Control (OFAC) said in a statement on Wednesday that it had sanctioned the Sinbad app, which North Korean hacking group Lazarus Group used to launder millions of dollars in DoD funds.
“Sinbad is also used by cybercriminals to hide transactions related to dangerous activities such as sanctions evasion, drug trafficking, purchase of child sexual abuse materials and additional illegal sales on darknet markets,” the announcement read.
Sinbad's website now shows a message saying the service is busy.
The feds sanctioned Blender in May 2022. Blockchain analytics firm Elliptic went on to believe that the coin mixer started out as Sinbad and continued to launder the money stolen from the hack.
Blender and Sinbad are coin mixers—tools that allow crypto users to send and receive cryptocurrencies like Bitcoin or Ethereum anonymously. By combining transactions, they work to hide their source and destination.
Criminals like the state-backed Lazarus Group, which has been linked to hundreds of millions of dollars in stolen crypto assets, use coin mixing to cover their tracks, according to the feds.
Hackers used Sinbad to launder $620 million in play-to-earn game Axie Infinity and Horizon Bridge attacks in which $100 million in crypto was stolen, the feds said Wednesday.
Last year, US authorities also banned US citizens from using Tornado Cash, Ethereum Coin Mixer and Lazarus.
Although the move has drawn criticism from politicians and some in the crypto community who say that privacy is a right and that criminals are not the only users of this app. In August, a court upheld the Treasury Department's decision to approve the project and rejected objections that the move violated America's First Amendment rights.
Edited by Stacy Elliott.
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