Breaking News: Atomic Wallet Hackers Seek Sanctuary In OFAC-Sanctioned Garantex

Key Points:

• North Korean hackers launder $35M stolen from Atomic Wallet through Russian crypto exchange Garantex and obfuscate the funds through Sinbad.io mixer; OFAC-sanctioned Garantex complicit in illicit transactions.
• Blockchain security firm Elliptic collaborates with exchanges to freeze stolen crypto, but Lazarus Group still finds ways to trade assets for Bitcoin.
• Analysis reveals Garantex transactions associated with illicit actors and darknet markets, while Blender.io (the former iteration of Sinbad.io) is sanctioned for supporting North Korea’s malicious cyber activities and money-laundering of stolen virtual currency.

Illicit funds gained from the $35 million Atomic Wallet hack are on the move again. According to blockchain security and compliance firm Elliptic, the North Korean hacking collective, the Lazarus Group, believed to be behind the attack, has used sanctioned Russian-based crypto exchange Garantex to launder the loot.

This is not the end of the story. In fact, Elliptic said that there had been a significant and successful cross-community effort between Elliptic and many exchange partners to freeze the stolen crypto. However, Lazarus has now found new ways to trade their assets for Bitcoin. This means that the funds are still at large and there is a risk of them being used for further illegal activities.

The U.S. Office of Foreign Assets Control (OFAC) sanctioned Garantex and the Russian Hydra dark web marketplace in April 2022. This was a significant move in the fight against money laundering and illegal cryptocurrency activities. Garantex was founded in late 2019 and originally registered in Estonia before moving the majority of its operations to Moscow, the Treasury Department noted at the time.

In addition, the Treasury Department reported that “analysis of known Garantex transactions shows that over $100 million in transactions are associated with illicit actors and darknet markets.” This highlights the extent of the problem and the need for more stringent measures.

The Treasury Department also sanctioned Blender.io (the former iteration of Sinbad.io) in May 2022, warning that the service was being used by North Korea to “support its malicious cyber activities and money-laundering of stolen virtual currency.” This further highlights the importance of cracking down on these services and those who use them.

On June 3, a number of Atomic Wallet user accounts were compromised, resulting in losses of up to $35 million in digital assets. Five days later, Atomic stated that it had engaged blockchain security and analyst company Chainalysis as the leading incident investigator. This is a positive step towards greater security and accountability in the crypto industry.

The notorious North Korean hacking collective has been linked to several major crypto exploits in the past year, including the Harmony Bridge hack and the Ronin Bridge hack. This shows the need for greater awareness and preparedness in the crypto community against these threats.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Annie

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