Cryptocurrency mixing service Blender.io has been hit with a crackdown by the United States Department of the Treasury.
The service, which allows users to add an additional layer of anonymity to their cryptocurrency transactions by “mixing” their tokens, will no longer be able to conduct transactions with US-based customers.
This is the first time a virtual currency mixer has been sanctioned according to the Under Secretary of the Treasury for terrorism and financial intelligence Brian Nelson.
Why the move?
The United States Treasury says the move is a result of Blender.io assisting cybercriminals, linked to North Korea, who stole nearly $620m in the March attack on game developer Axie Infinity's Ethereum sidechain Ronin Bridge.
The government department alleges Blender.io was used to process $20.5m worth of ill-gotten coins.
“The virtual currency mixers that assist criminals are a threat to US national security interests,” said a Department of the Treasury spokesperson. “Treasury will continue to investigate the use of mixers for illicit purposes and consider the range of authorities Treasury has to respond to illicit financing risks in the virtual currency ecosystem.”
The Ronin attack wasn’t the first time that Blender.io has been involved in illicit activity according to the department’s statement.
Blender.io’s service has helped to launder around $500 million in Bitcoin since it first launched in 2017, and helped to facilitate transactions with Russia-linked ransomware groups such as Trickbot, Conti, Ryuk, Sodinokibi, and Gandcrab.
The Blender.io sanctions weren’t the only move to stamp down on cybercrime announced by the US treasury.
In addition, the department added four new cryptocurrency wallet addresses linked to North Korea’s Lazarus Group, which was widely blamed for 2017’s devastating WannaCry ransomware attack on the NHS and which the US government sanctioned in 2019.
The move comes amid broader crackdowns on Russia-related crypto crime.
In a blog post, the Coinbase’s Chief Legal Officer, Paul Grewal, said the accounts had been engaging in “illicit activity”, and while the company does cooperate with the US Government on such matters, claims these accounts have been identified through its own proactive investigations.
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Will McCurdy has been writing about technology for over five years. He has a wide range of specialities including cybersecurity, fintech, cryptocurrencies, blockchain, cloud computing, payments, artificial intelligence, retail technology, and venture capital investment. He has previously written for AltFi, FStech, Retail Systems, and National Technology News and is an experienced podcast and webinar host, as well as an avid long-form feature writer.