WASHINGTON - The United States on Friday imposed sanctions on virtual currency mixer Blender, accusing it of being involved in one of the largest cryptocurrency heists on record and being used by North Korea, the U.S. Treasury Department said.

The Treasury also identified new virtual currency addresses it said were used by North Korean hacking group Lazarus to launder illicit proceeds, accusing it of stealing hundreds of millions of dollars' worth of cryptocurrency tied to popular online game Axie Infinity.

"We are taking action against illicit financial activity by the DPRK (North Korea)," Brian Nelson, the Treasury's under secretary for terrorism and financial intelligence, said in the statement.

Reuters could not immediately reach Blender for comment. The North Korean mission to the United Nations in New York did not immediately respond to a request for comment.

The Treasury said it was the first time the U.S. imposed sanctions on a virtual currency mixer - a software tool that pools and scrambles cryptocurrencies from thousands of addresses - and said it would continue to investigate the use of mixers for illicit purposes.

North Korea has stepped up efforts to launder stolen cryptocurrency, significantly increasing its use of mixers, blockchain analytics and cybersecurity firm Chainalysis said.

The Treasury said Blender was used in the laundering process for North Korea's Axie Infinity heist, accusing it of processing over $20 million in illicit proceeds.

The Treasury said Blender also facilitated money-laundering for Russian-linked malign ransomware groups, among others.

Hacks have long plagued crypto platforms. Ronin, a blockchain network that lets users transfer crypto in and out of Axie Infinity, said digital cash worth almost $615 million was stolen on March 23.

The U.S. Treasury has said Lazarus is controlled by the Reconnaissance General Bureau (RGB), North Korea's main intelligence agency, which is already subject to U.S. and United Nations sanctions.

(Reporting by Daphne Psaledakis and Kanishka Singh in Washington and James Pearson in London; Editing by Chizu Nomiyama and John Stonestreet)