The U.S. Treasury Department has announced it is sanctioning an online crypto tool known as Blender. Allegedly, the tool is being used by North Korea to steal and launder digital currency funds.
Blender Is Being Targeted by U.S. Regulators
North Korea has long been the subject of crypto speculation amongst U.S. regulators. The country was recently labeled the guilty party behind the Axie Infinity hack – a crypto gaming system – that saw more than $600 million in digital funds disappear overnight. In addition, the country is also home to hacking groups such as Lazarus, which are amongst the deadliest hacking organizations across the globe. Thus far, Lazarus has carried out attacks on countries in North America, Europe, and Asia.
Blender – or Blender.io, as it’s also called – is a tool that’s known as a “mixer.” In other words, it is digital currency software designed to anonymize the source of any crypto funds that cross its path. The tool is allegedly being used to hide stolen funds or swap stolen crypto units out for “cleaner” or washed money.
Brian E. Nelson – undersecretary of the Treasury for Terrorism and Financial Intelligence – explained in a statement:
Today, for the first time ever, [the] Treasury is sanctioning a virtual currency mixer. Virtual currency mixers that assist illicit transactions pose a threat to U.S. national security interests. We are taking [necessary] action against illicit financial activity by the DPRK and will not allow state-sponsored thievery and its money-laundering enablers to go unanswered.
On the Blender website, the tool is described as something that “breaks the connection” between transactions. It is also advertised as something that will make authorities “unaware” of where the crypto in question comes from and who owns it. The website reads:
You send bitcoins from your address to the mixer address. After that, the mixer sends you bitcoins from its premixed reserve. Bitcoins in this reserve have no connection to your addresses [sic]. An observer analyzing the chain of transactions [sic] in the blockchain is unaware of the change in ownership of bitcoins. Therefore, any following bitcoins passed through the mixer is no longer practical. This way, the mixer ensures the anonymity of your transaction in blockchain.
The U.S. Is Focusing on North Korea and Russia
The Treasury concluded its statement by mentioning:
While the purported purpose is to increase privacy, mixers like Blender are commonly used by illicit actors… OFAC [Office of Foreign Asset Control] is identifying four additional virtual currency wallet addresses used by the Lazarus Group to launder the remainder of stolen proceeds from the March 2022 Axie Infinity heist.
North Korea has long been the subject of U.S. sanctions, though now American regulators appear to be focusing their sights more on Russia, which recently invaded its neighbor Ukraine and is alleged to be using cryptocurrency to avoid U.S.-based financial rules.