US Deputy Treasury Secretary Wally Adeyemo
US Deputy Treasury Secretary Wally Adeyemo said authorities would not hesitate to act against illicit actors in the digital asset ecosystem. AFP

The United States on Wednesday slapped sanctions on a crypto mixer that it said was serving as a money laundering tool for hackers affiliated with the North Korean government.

Crypto mixers are software allowing users to obfuscate transactions, and have been used by hackers in attempts to convert crypto into traditional currency.

The US Treasury Department said in a statement that its action against comes as the mixer has processed millions of dollars in virtual currency from heists conducted by a hacking group that is under sanctions.

"Mixing services that enable criminal actors, such as the Lazarus Group, to launder stolen assets will face serious consequences," said Deputy Treasury Secretary Wally Adeyemo, referring to the hacking organization.

"While we encourage responsible innovation in the digital asset ecosystem, we will not hesitate to take action against illicit actors," Adeyemo added.

State Department spokesman Matthew Miller said Pyongyang's "aggressive cyber-theft campaign" has been flagged by experts for its role in generating funds for North Korea's nuclear and ballistic missile programs.

Last year US officials imposed sanctions against another virtual currency mixer,, also charged with providing services to Lazarus Group.

The Treasury said Wednesday that Sinbad is believed by some experts to be a successor to

Sinbad was used to launder a "significant portion" of $100 million worth of virtual currency stolen in June from customers of Atomic Wallet, said the Treasury.

It added that the tool was also tapped to launder a portion of virtual currency from another heist of approximately $620 million last year.

In separate remarks released Wednesday, Adeyemo was expected to tell a summit in Washington that inaction by too many crypto firms in preventing abuse of digital assets "represents a clear and present risk to our national security."

In prepared remarks to the Blockchain Association's policy summit, he added that the Treasury is asking Congress to consider reforms that would expand its tools to pursue illicit actors in the digital asset space.

"We are calling on Congress to create a secondary sanction regime that will not only cut off a firm from the US financial system, but will also expose any firm that continues to do business with the sanctioned entity to being cut off," the remarks say.

Last week, US officials announced a deal under which cryptocurrency exchange Binance will pay over $4 billion in penalties, while its chief executive Changpeng Zhao stepped down and pleaded guilty to money laundering violations.

Adeyemo said the government's challenge goes beyond cryptocurrency exchanges.