Russian Crypto Mixing Bosses Face Decades in Prison

Three Russian nationals have been indicted for allegedly operating now-defunct cryptocurrency mixing services Blender.io and Sinbad.io.

Roman Vitalyevich Ostapenko, Alexander Evgenievich Oleynik and Anton Vyachlavovich Tarasov could face decades behind bars on allegations they offered crypto-laundering services to cybercriminals.

The trio are said to be the operators of Blender.io and Sinbad.io, two cryptocurrency mixers that allowed their users, for a fee, to transact crypto in a manner designed to hide the original source, making them safe havens for criminals – especially ransomware operators.

“Blender.io and Sinbad.io were available for use by the public via the internet and used by criminals looking to distance themselves from the fact that their funds came from cryptocurrency thefts, ransomware attacks, and other crimes,” the US Department of Justice said in a press release.

‘No way your identity is compromised’

Blender.io, which operated from approximately 2018 to 2022, promoted a “No Logs Policy,” with the administrators stressing that any traces of user transactions are instantly deleted.

According to the DOJ:

“Blender was described as not requiring users to sign up, register, or ‘provide any kind of detail except the receiving address!’ The advertisement asserted that, ‘[a]s there are no personal details asked for, there’s no way your identity is compromised, or can be linked back to, because as far as blender.io goes they don’t know who you are.’ After Blender.io shut down, Sinbad.io began operating a few months later. Like Blender.io, Sinbad.io provided users with Bitcoin concealment services. And, on November 27, 2023, Sinbad.io was taken down through law enforcement action.”

Both mixers were sanctioned multiple times by the Department of Treasury’s Office of Foreign Assets Control (OFAC):

·      In 2022, OFAC sanctioned Blender.io, citing its use by the Democratic People’s Republic of Korea (DPRK) to launder stolen virtual currency

·      OFAC’s public sanctions announcement also explained that Blender.io laundered funds for multiple ransomware groups

·      On November 29, 2023, OFAC sanctioned Sinbad.io, publicly citing its use by a DPRK state-sponsored hacking group and cybercriminals to obfuscate transactions linked to other criminal offenses.

Only two arrested (so far)

As authorities from the Netherlands and Finland worked to shutter the mixers, their operators remained at large. A year later, shortly after Sinbad.io’s online infrastructure was seized as part of a coordinated law enforcement action, police tracked down and cuffed Ostapenko and Oleynik. Tarasov remains at large.

55-year-old Ostapenko is charged with one count of conspiracy to commit money laundering and two counts of operating an unlicensed money transmitting business. Oleynik, 44, and Tarasov, 32, are both charged with one count of conspiracy to commit money laundering and one count of operating an unlicensed money transmitting business.

As with all indictments, the defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, they each face a maximum penalty of 20 years in prison for the money laundering conspiracy count and five years for each unlicensed money transmitting business count.

A federal district court judge will determine the final sentence after considering the US Sentencing Guidelines and other statutory factors.