Four Russians who operated cryptocurrency mixing sites Blender.io, Sinbad.io as well as Blender.io have been charged with money laundering.
This news comes after Blender.io, a crypto-mixer sanctioned by the United States government in November 2023, relaunched as Sinbad.io. United States authorities quickly followed suit, pursuing the newly created entity.
Indictments dated 10 January charge Alexander Evgenievich Oleynik and Roman Vitalyevich Ostapenko with operating Blender.io, Sinbad.io, crypto mixers. They are accused of laundering money from illegal activities. This court case highlights a number of high-profile transactions that involved the crypto mixing service in question.
Blender.io received a ransomware payment of approximately 0.385 Bitcoins (BTC), which was worth about $24,000. Sinbad.io received 5.409 Bitcoins worth $147.136 in early June 2023. Indictments state that funds involved wire fraud, illegal transactions with access devices fraud and other types of fraud.
Eric Rosen, a partner with the Boston-based law firm Dynamis claimed in a post that this document was illegitimate. “provides virtually no clue as to how the charged defendants are guilty of money laundering.” He argued instead, "it is guilt by association—tainted money went through the mixers, and therefore, the defendants are guilty of money laundering.”
According to Rosen, the Department of Justice withheld “all actual criminal allegations and instead presumes “knowledge” of the underlying frauds by the defendants.” Furthermore, he noted that “there are few, if any, concrete allegations tying the underlying criminal activity to the United States,” which raises jurisdictional issues and extraterritoriality.
Niko Demchuk, Head of Legal at crypto compliance firm AMLBot, told Decrypt that the charges are the "”The precedent that was set by the Tornado Cash Mixer founders being charged with money laundering.” He said that the Tornado Cash case is a precedent. “paved the way for any mixer founder to be charged with money laundering in the USA.”
In 2024 it was generally recognized that digital privacy would be a major issue in the cryptocurrency world. Privacy serves as the very foundation of the cryptocurrency movement, with the crypto anarchist manifesto by cypherpunk Timothy May—which predates Bitcoin itself—predicting scenarios now made possible with crypto.
He thought that technological advancements would allow for a more efficient use of his time. “individuals and groups to communicate and interact with each other in a totally anonymous manner.” Then, “two persons may exchange messages, conduct business, and negotiate electronic contracts without ever knowing the True Name, or legal identity, of the other.”
May admitted it himself “anonymous computerized market will even make possible abhorrent markets for assassinations and extortion,” And that “various criminal and foreign elements will be active users” These networks are a good example. Yet, he still claimed that “this will not halt the spread of crypto anarchy” You can also find out more about the following: “it surely will be both a social and economic revolution.”
Crypto has largely tempered down the early vision. And many see anti-money laundering and Know-Your-Customer measures either positively, or as necessary evils. Many people still view government action against crypto-mixers as being overreaching.
The U.S. sanctions against Tornado Cash, for example were deemed to be illegal later because it was a decentralized crypto-mixer that had no centralized person or group responsible. Roman Storm, the developer of the project, filed a motion for dismissal after the sanctions were dropped.
Stacy Elliott is the editor.