Meet the Creator of North Korea’s Favorite Crypto Privacy Service

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In the cryptocurrency economy, there is often a fine line between financial privacy and money laundering. Now, a Bitcoin “mixer” service called Sinbad.io is walking that tightrope in public view: just months after launching on the open web, it seems to have already become the preferred money laundering outlet. of the most prolific state in the world. sponsored crypto thieves.

In part of its annual crime report released last week, blockchain analytics firm Chainalysis noted that Sinbad, which like other mixing services offers to thwart cryptocurrency tracing efforts by taking users’ cryptocurrency into account, mixing their coins with those of other users, and returning the same amount – had received $25 million in stolen cryptocurrency from North Korean hackers in December and January alone, more than any other mixing service had received.

Those funds, according to Chainalysis, include parts of the thieves’ proceeds from mass break-ins that targeted the Harmony Bridge service, from which the North Koreans stole around $100 million, as well as the Ronin Bridge service, from which the hackers stole $650. $. million. Chainalysis VP of Investigations Erin Plante says North Korean crypto-stealing cybercriminals began funneling their profits bit by bit through Sinbad almost immediately after the mixer launched in October, hoping to hide the origin of their loot before cashing it in an exchange. Sinbad “quickly hit North Korea’s radar,” Plante says, “and it’s become their favorite.”

This put the new service in an awkward position: just a few weeks after its debut, Sinbad became a tool that runs publicly – with a traditional website running in the open in addition to a dark website running on the net. of anonymity Tor – and yet some of its most prominent early users also happen to be the crypto world’s most notorious cybercriminals. According to Chainalysis findings, North Korean hackers stole as much as $1.7 billion in cryptocurrency last year, helping to make the year the worst on record for total crypto theft. .

The Sinbad founder, meanwhile, claims in an email interview with WIRED that the service has no reason to hide. “Sinbad is on clearnet because it does nothing 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 of Internet users, against autocracies and dictatorships,” adds Mehdi. “Every living person has the right to privacy.”

Mehdi, who declined to reveal his real name or where he or Sinbad are based, says he created Sinbad in response to the increasing centralization of cryptocurrency and the erosion of privacy promises it once seemed to offer. He named his mixing service after the fictional sailor from the Middle East who, as Mehdi puts it, “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. identities of people.

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