US and European Authorities Target Crypto Service Allegedly Laundering Money for North Korean Leaders
US, European authorities join forces to combat illicit crypto activities, exposing a prominent service accused of aiding North Korean leaders in laundering millions Treasury Department sanctions imposed on the alleged money-laundering operation
The US Treasury Department imposed sanctions on a cryptocurrency service on Wednesday, alleging that it assisted in laundering millions of dollars for the North Korean regime. This action is part of ongoing efforts to curb a major source of funding for Pyongyang's nuclear weapons and missile programs.
The website of the crypto service known as Sinbad has been seized by the FBI and European law enforcement agencies, as indicated by a notice that appeared on the site on Wednesday. According to a senior White House official, approximately half of North Korea's missile program has been financed through cyberattacks and cryptocurrency theft.
For years, U.S. officials have been searching for innovative methods to intercept stolen cryptocurrency before North Korea can convert it into the hard currency necessary to procure weapons.
The exploitation of cryptocurrency and other technology companies by Pyongyang to finance its weapons program is routinely included in intelligence briefings for senior U.S. officials, including President Joe Biden, according to a former senior U.S. official who spoke to CNN.
The US Treasury has accused Sinbad of laundering a substantial amount of money from three separate cryptocurrency firm hacks over the past two years, with North Korean involvement in each theft totaling at least $100 million. Sinbad, a "mixing service," is known as a publicly available tool used to conceal the origin of cryptocurrency transactions. Analysts note that North Korea has increasingly relied on such mixers to transfer money, especially as law enforcement agencies in the US, South Korea, and other countries have intensified their scrutiny.
Earlier this year, a CNN investigation revealed that the South Korean intelligence service collaborated with private crypto-tracking experts in January to seize approximately $1 million in cryptocurrency stolen by North Koreans from a victim.
US officials and North Korea experts have stated that the North Korean regime has employed thousands of IT workers operating overseas, occasionally adopting false identities as foreign nationals, in order to generate revenue. In a separate CNN investigation, it was discovered that a cryptocurrency entrepreneur had unknowingly transferred tens of thousands of dollars to a North Korean IT worker.
Sinbad has emerged as a top choice for Pyongyang's crypto mixers after the US Treasury sanctioned another popular mixer for North Koreans in August 2022, according to experts. "The money laundering methods of North Korean cyber criminals are constantly changing," said Nick Carlsen, a former FBI intelligence analyst specializing in North Korea. Despite the seizure of Sinbad's public website, its dark-web site remains operational, Carlsen added.
Carlsen, who currently works at the fraud-investigating firm TRM Labs, stated that "Amid the US law enforcement crackdown on Sinbad, we are already seeing [North Korea] move elsewhere." He referenced multiple other crypto mixing services that the North Koreans are still utilizing.
