Operators of Blender and Sinbad Custodial Bitcoin Mixers Arrested and Charged with Money Laundering
The U.S. Department of Justice (DOJ) has indicted Russian citizens Roman Ostapenko, Alexander Oleynik, and Anton Tarasov, charging them with money laundering and operating an unlicensed money transmitting businesses via custodial mixers Blender.io and Sinbad.io.
- The indictment claims that the crypto-mixing services operated by the three men enabled criminals to launder funds stolen from ransomware victims, virtual currency thefts, and other crimes.
"By allegedly operating these mixers, the defendants made it easier for state-sponsored hacking groups and other cybercriminals to profit from offenses that jeopardized both public safety and national security," said Principal Deputy Assistant Attorney General Brent Wible.
- On December 1, 2024, Ostapenko and Oleynik were arrested, while Tarasov remains at large. They all face charges for conspiracy to commit money laundering and for operating an unlicensed money-transmitting business, which could lead to prison sentences exceeding 25 years upon conviction.
- The US Department of the Treasury's Office of Foreign Assets Control (OFAC) sanctioned Blender in May 2022. In November 2023, OFAC also sanctioned Sinbad.io, citing its use by a North Korean state-sponsored hacking group and cybercriminals to obscure transactions related to other criminal activities.
"Blender.io operated from approximately 2018 to 2022. The service was advertised on a popular internet forum as having a 'No Logs Policy' and deleting any traces of user transactions. Additionally, in the advertisement, Blender was described as not requiring users to sign up, register, or 'provide any kind of detail except the receiving address!' The advertisement asserted that, '[a]s there are no personal details asked for, there’s no way your identity is compromised, or can be linked back to, because as far as blender.io goes they don’t know who you are,'" was stated in the press release.
- The aggressive prosecution of Bitcoin and crypto privacy services that aid individuals in protecting their security, while also being used by hacking groups to conceal illicit gains, has been a point of contention for policymakers worldwide.
- While operators of custodial mixing services already have a history of being prosecuted as "unlicensed money transmission businesses," law enforcement agencies have also begun targeting non-custodial privacy services such as Tornado Cash and Samourai Wallet, which could to set a dangerous precedent against vital security tools for transactions on public ledgers.
"This indictment demonstrates our continued commitment to dismantling infrastructure used by cybercriminals to steal from Americans and hide their ill-gotten gains," said U.S. Attorney Ryan K. Buchanan for the Northern District of Georgia.
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