In cryptocurrency economy, there is often a fine line between financial privacy and money laundering. Now one bitcoin “mixer” service called Sinbad.io is walking that tightrope in full view: just a few months after launching on the open web, it appears to have already become the money laundering tool of choice for the most prolific nation in the world. sponsors crypto thieves.
In part of it annual crime report released last weekblockchain analysis company Chainalysis noted that Sinbad, which, like other mixing services, proposes to thwart cryptocurrency tracking efforts by accepting users’ crypto, mixing their coins with other users’ coins and returning the same amount, received $25 million in stolen cryptocurrencies from North Korean hackers in just December and January, more than any other mixing service received.
These funds, according to Chainalysis, include a portion of thieves’ proceeds from massive heists aimed at the Harmony Bridge service, from which North Koreans stole about $100 million, as well as the Ronin Bridge service, from which hackers stole a staggering $650 million. Erin Plante, VP of Investigations at Chainalysis, says that North Korean cybercriminals involved in the theft of cryptocurrencies began to funnel their profits through Sinbad almost immediately after the mixer launched in October in hopes of hiding the origin of their mining before cashing it out on the exchange. Sinbad “quickly came to the attention of North Korea,” says Plante, “and became their favourite.”
This put the new service in an awkward position: just a few weeks after its debut, Sinbad became a public tool—with a traditional open-air website in addition to a dark web site running on the anonymous Tor network—and yet some of its first and largest users also turned out to be the most notorious cybercriminals in the crypto world. North Korean hackers stole at least $1.7 billion in crypto last year, according to Chainalysis findings, helping to make the year the most successful ever. worst ever cryptocurrency theft.
Meanwhile, the founder of Sinbad’s claims in an email interview with WIRED that the service has no reason to hide. “Sinbad is on the clearnet because he doesn’t do anything wrong,” writes the creator and administrator of the service, who asked to be called “Mehdi,” using the term “clearnet” to refer to a website not hidden on the Tor network.
“I am against total surveillance, control over Internet users, against autocracies and dictatorships,” Mehdi adds. “Every living person has the right to privacy.”
Mehdi, who refused to reveal his real name or Sinbad’s whereabouts, says he created Sinbad in response to the growing centralization of the cryptocurrency and the weakening of the privacy promises it once offered. He named his mixer after a fictional Middle Eastern sailor who, according to Mehdi, “traded goods all over the world.” Mehdi describes Sinbad as a legitimate privacy-preserving tech project, comparing it to privacy-focused cryptocurrencies like Monero or Zcash, anonymity-enhancing crypto wallet software like Wasabi, and the Tor browser, which encrypts user traffic and routes it through multiple servers to hide people’s identities.