The United States Department of Treasury has issued its first ever sanction against a cryptocurrency mixer service.
U.S. Treasury Sanctions Blender.io
Yesterday, the U.S. Treasury issued its first ever sanction against a cryptocurrency mixer service called Blender. To understand what this means, you need to understand what a cryptocurrency mixer is. Basically, it's a service that allows users to deposit crypto and over time receive "fresh crypto" that other users have deposited. What this does is further obfuscates the path of money from one address to the next. I don't wanna call it money laundering because it isn't all bad.
So with that kind of service in existence, there's going to be bad people that use it for bad things. Case in point here - Lazarus Group, sponsored by the Democratic People's Republic of Korea, hacked Ronin Bridge and stole $620 million worth of cryptocurrency. As you can imagine, moving around $620 million in stolen money is not easy, especially on a public blockchain like Ethereum. So Lazarus Group started funneling over $20 million through Blender to launder the money, and thus make it less traceable.
When you're trying to use stolen money to create weapons of mass destruction, it's kinda hard to fly under the radar, Korea. Sorry to say.
It seems that Blender has already been taken offline due to the sanctions issued. Whether Blender knew that their service was being used to launder money from terrorist organizations or not, they did facilitate it. Also for the first time ever, cryptocurrency wallet addresses are being added to the SDN list (I learned what the SDN list is from watching the last season of Ozark). The SDN list is Specially Designated Nationals and Blocked Persons, which is not a list you wanna be on.
Individuals and organizations on this list are watched heavily and typically considered a threat to the United States. Lazarus Group was sanctioned in 2019 and identified as being controlled by DPRK and involved with international arms trade.
OFAC’s investigation also identified Blender’s facilitation of money-laundering for, among others, Russian-linked malign ransomware groups including Trickbot, Conti, Ryuk, Sodinokibi, and Gandcrab.
The worst part for Blender was that this isn't the only time that their service has been used to launder large amounts of stolen money.
This makes me wonder if Tornado.Cash might suffer a similar fate eventually. There's no telling how much money gets laundered through there that flies under the radar. The thing is, when doing this kind of illegal activity, it needs to be done slowly and in very small amounts. Wanna hide from the government? Maybe don't move $20 million into a crypto mixer all at one time.
I guess they are smarted than some of these idiots out here doing NFT rug pull after rug pull then cashing straight out via Binance. But come on, cyber criminals... You can do better than that. Especially if you're controlled by the government of another country!
This kind of shit is what people like to highlight when they're talking about all the reasons not to use cryptocurrency. "It is used to launder money and do illegal stuff", well yeah. So is cash. More cash is used for illegal activity than you could even imagine on a daily basis but you don't see people opting to not use it because of that.
RIP Blender. Hopefully the government won't decide to use this as another reason not to adopt crypto but they probably will. Any kind of dirt like this the boomers in charge can get ahold of is just another reason to be against crypto. They see cryptocurrency as a threat to our entire financial system, when really the biggest threat to our financial system is, the financial system itself.
Thanks for reading! Much love.
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