US Treasury Sanctions Blender.IO in Relation to $620M Ronin Hack
Over $20M funnelled through Blender.io
The US Department of Treasury has sanctioned cryptocurrency firm Blender.io for involvement in the recent Ronin hack of $620 million of cryptocurrency tokens. It’s the first business of this kind to be hit with sanctions by the US government.
According to the news report from the Infosecurity site, the US Treasury’s Office of Foreign Assets Control or OFAC claims that Blender.io was used by the DPRK hacking group, Lazarus, to launder $20 million of the $620 million stolen assets from the Ronin network. This has prompted the US Treasury Department to action by filing sanctions to prevent further acts of money laundering of digital assets involved in hacking incidents.
As per the Treasury Department’s Undersecretary for Terrorism and Financial Intelligence Brian Nelson, “Today, for the first time ever, Treasury is sanctioning a virtual currency mixer.” Nelson goes on to say that “virtual currency mixers that assist illicit transactions pose a threat to US national security interests. We are taking action against illicit financial activity by the DPRK and will not allow state-sponsored thievery and its money-laundering enablers to go unanswered.”
This sends a strong message that the US government does not take the hacking of virtual assets lightly especially when it involves state-sponsored attacks.
Blender.io is a crypto mixer that pools cryptocurrency from a variety of customers before redistributing it. The idea is to increase the privacy of their customer’s transactions but it is understandable to see that this method also attracts a more criminal element who are looking to remain anonymous.
As of this writing, the site Blender.io has been inaccessible, most likely due to the sanctions imposed.
The Ronin network is the blockchain network used by the popular play-to-earn Axie Infinity by Vietnam-based Sky Mavis. The SM team announced earlier this year that the Ronin network was hacked last March 23 when hackers exploited a vulnerability with the bridge that connected the Ronin network to the main Ethereum network. Since then, the company has been trying to recover funds but with minimal success.
This Ronin hack is also the largest recorded DeFi hack of all time which is why it has garnered a lot of attention as of late including from the US government. It is believed that the currency stolen from the hack will be used to fund North Korea’s weapons and ballistic program.
There is a concern of course from the wider cryptocurrency community as blockchain technology was developed to keep the privacy and security of the users and it’s designed to be decentralized so that no one agency is in control of the currency. The involvement of the US Treasury department is of course seen as a possible infringement of that decentralized system.