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Axie Infinity Hack: Crypto Mixer Sanctioned by US Treasury

This is the first time that a Crypto Mixer is on a Sanctions List. But what is a crypto mixer? How is it related to the hack?

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On May 6, nearly a month after identifying the culprit as the North Korean hacking group Lazarus, the United States Treasury Department Office of Foreign Assets Control (OFAC) announced that it will impose sanctions on the cryptocurrency mixer Blender.io. The punishment is for its role in laundering proceeds from the hacking of Axie Infinity’s Ronin Bridge. According to OFAC, the crypto mixer processed $20.5 million out of the $620 million taken by the hackers.

The embargo of Blender.io is the first time the Treasury has placed a cryptocurrency mixer on its sanctions list.

“Today, for the first time ever, (the) Treasury is sanctioning a virtual currency mixer. […] We are taking action against illicit financial activity by the DPRK [North Korea] and will not allow state-sponsored thievery and its money-laundering enablers to go unanswered.” –OFAC

Accordingly, OFAC noted that during its investigation it found that Blender.io also facilitated money laundering for Russia-linked ransomware groups including Trickbot, Conti, Ryuk, Sodinokibi, and Gandcrab. 

The Treasury agency was also able to add to its List of Specially Designated Nationals and Blocked Persons the addresses of four wallets used by Lazarus Group to launder some of the stolen funds 

“Virtual currency mixers that assist illicit transactions pose a threat to U.S. national security interests,” –Brian Nelson, undersecretary of the Treasury for terrorism and financial intelligence

What is Blender.io?

According to OFAC, Blender.io operates on the Bitcoin blockchain and helps facilitate illicit transactions by obscuring its origins, destination and counterparties. Blender.io has transmitted more than $500 million worth of bitcoin since its creation in 2017. OFAC is the Treasury’s department that implements and enforces U.S. sanctions

The hack on popular play-to-earn game Axie Infinity happened on March 23 where they suffered an exploit of 173,600 Ethereum (ETH) and 25.5 million USD Coin (USDC).  (Read more: Axie Infinity Ronin Network Hack)

In an exclusive article for BitPinas, Lorne Lantz of tracking tool Breadcrumbs revealed how the stolen funds move and what the hacker did to exploit the Ronin Network. It was discovered that the funds were also scattered in crypto wallets and exchanges such as Binance, FTX, and Crypto.com.(Read more: Tracking the Stolen Funds from Ronin Network Using Breadcrumbs)

Last month, $5.8 million out of $625 million have been recovered by crypto wallet and exchange Binance.  Binance Recovers $5.8M worth of Stolen Funds Linked to Axie Infinity Hack

This article is published on BitPinas: US Treasury Sanctions Crypto Mixer Related To Axie Infinity Hack

Disclaimer: BitPinas articles and its external content are not financial advice. The team serves to deliver independent, unbiased news to provide information for Philippine-crypto and beyond.

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