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US Adds Virtual Currency Mixer to Sanctions List Over North Korea's Cyber Activities

FILE - The North Korean flag flies at the country's embassy compounds in Kuala Lumpur, March 19, 2021.

The United States on Friday imposed sanctions on virtual currency mixer Blender, accusing it of being involved in one of the largest cryptocurrency heists on record and of being used by North Korea, the U.S. Treasury Department said.

The Treasury also identified new virtual currency addresses it said were used by the North Korean hacking group often dubbed "Lazarus" to launder illicit proceeds, accusing the group of carrying out the theft of hundreds of millions of dollars' worth of cryptocurrency tied to the popular online game Axie Infinity.

"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," Brian Nelson, the Treasury's undersecretary for terrorism and financial intelligence, said in the statement.

The Treasury said it was the first time the U.S. imposed sanctions on a virtual currency mixer.

North Korea has stepped up efforts to launder stolen cryptocurrency, significantly increasing its use of mixers, or software tools that pool and scramble cryptocurrencies from thousands of addresses, blockchain analytics and cybersecurity firm Chainalysis said.

The Treasury said Blender is a virtual currency mixer that operates on the Bitcoin blockchain, accusing it of facilitating illicit transactions by obscuring their origin and destination.

It said Blender was used in the laundering process for North Korea's Axie Infinity heist, accusing it of processing over $20 million in illicit proceeds.