3 Russians Face Money Laundering Charges Over Mixing Services: DOJ

Three Russian nationals tied to operating sanctioned crypto mixing services Blender.io and Sinbad.io have been charged with money laundering by a federal grand jury in Georgia, the U.S. Department of Justice said in a statement on Friday.

Roman Vitalyevich Ostapenko and Alexander Evgenievich Oleynik had been arrested last month, and they face money laundering charges. A third person tied to the services’ operations, Anton Vyachlavovich Tarasov, is at-large, the DOJ said.

Authorities from multiple jurisdictions had already seized and dismantled the computer equipment behind the services. Blender.io had previously been sanctioned by the U.S. Treasury Department for aiding in the concealment of the crypto proceeds of cyber thefts conducted by North Korean hackers. That move marked the Treasury’s first sanctions against a crypto mixer, which is a service that aims to anonymize transactions and erase the public trail of digital assets.

“According to the indictment, the defendants operated cryptocurrency ‘mixers’ that served as safe havens for laundering criminally derived funds, including the proceeds of ransomware and wire fraud,” said Principal Deputy Assistant Attorney General Brent S. Wible, the DOJ’s criminal division chief, in a statement. “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.”

Read More: Crypto Mixer Sanctioned by U.S. Treasury for North Korea Allegations, as FBI, Dutch and Finnish Police Seize Website

The prosecution of crypto mixing services – the controversial businesses that represent both the sector’s vulnerability to criminal use and its championing of financial privacy – has been a point of contention for U.S. policymakers and members of Congress.

In the most famous case, the pursuit of Tornado Cash, the Treasury’s sanctions were overturned in November by a federal appeals court, ruling that the technology underpinning such services can’t be targeted this way. However, the government is still pursuing criminal prosecutions of Tornado Cash’s founders.

Blender.io operated from 2018 to 2022 before it was taken down by authorities, to be quickly replaced by Sinbad.io, which drew similar sanctions from the Treasury Department.