On Friday, the US Treasury Department sanctioned Blender.io for its role in laundering money stolen from Axie Infinity. According to the department, this was the first time the U.S. Treasury Department has ever sanctioned a virtual currency mixer.

Background information on the Ronin Network hack

On March 23 of this year, a North Korean hacking group, Lazarus, stole nearly $620 million from the Ronin Bridge to support the popular blockchain game called Axie Infinity. According to the department Office for Foreign Assets Control (OFAC), these hackers used Blender.io to process more than $20.5 million of the illicit proceeds. In fact, at the time of writing, Blender’s website is no longer open to the public.

What is Blender.io?

First of all, Blender.io (Blender) is a virtual currency blender that works on the Bitcoin blockchain. How it works is that Blender shuffles a variety of transactions before broadcasting them to their final destinations. Therefore, there is no way for us to tell the stolen funds apart after the shuffling process. Although the intent was to increase privacy, many cyber criminals used these crypto mixers to launder money instead.

Unsurprisingly, since its inception in 2017, Blender has helped move more than $500 million worth of Bitcoin. According to OFAC, Blender.io also facilitated money laundering for several other Russia-linked ransomware groups. Some on the list are Trickbot, Conti, Ryuk, Sodinokibi, and Gandcrab.

Any refunds for victims of the Ronin Bridge hack?

In fact, yes, there was. In April, the team behind Axie Infinity, Sky Mavis, committed $450 million of its own funds to compensate victims of the Ronin Bridge hack. Additionally, the company raised $150 million in a Binance-led funding round to repay users. This added up to $600 million worth of funds, which should be enough to recoup most of the lost funds.