The US Department of Justice has accused the two founders of the Tornado Cash cryptocurrency mixer, Roman Shtorm and Roman Semyonov, of helping criminals (including the North Korean gang Lazarus) launder more than $1 billion in stolen cryptocurrencies. Storm was arrested in Washington, and Semyonov was charged in absentia.
Let me remind you that back on August 8, 2022, the US Office of Foreign Assets Control (OFAC) stated that in total, more than $ 7 billion was laundered through Tornado Cash, created in 2019, and its operators could not or did not want to enter " effective controls designed to prevent money laundering on a regular basis.”
As a result, sanctions were imposed against the mixer service: all property and property interests of Tornado Cash (located in the USA or owned or controlled by persons from the USA) turned out to be blocked, they now need to be reported to OFAC. Also, US citizens and others in the United States are no longer able to do business with Tornado Cash without special permission from OFAC. In addition, any organizations that are directly or indirectly owned by such people by 50 percent or more were also "banned".
The authorities claimed that the sanctions were due to the fact that funds stolen by hackers as a result of the Harmony hack (about $ 96 million) passed through Tornado Cash, funds received as a result of the compromise of the Ronin blockchain, which is closely associated with the popular NFT game Axie Infinity (more than 600 million dollars, 455 million was laundered through the mixer), as well as about 7.8 million dollars received during the compromise of the Nomad cryptocurrency bridge.
As now reported by the US Department of Justice, one of the founders of the mixer, 34-year-old Roman Storm, was arrested last Wednesday in the state of Washington, where he lives. The other defendant, 35-year-old Roman Semyonov, a Russian citizen, remains at large. The Office of Foreign Assets Control has announced sanctions against Semyonov for providing support to the North Korean government.
Storm and Semyonov are believed to have founded Tornado Cash in 2019 with Aleksey Pertsev, who was arrested in the Netherlands last August on money laundering charges.
Both men are charged with conspiracy to commit money laundering and conspiracy to violate the International Economic Emergency Powers Act. The maximum penalty for each of these charges is 20 years in prison.
Also, the founders of Tornado Cash are accused of conspiring to run an unlicensed money transfer business, and the maximum penalty in this case is up to five years in prison.
“Even after [the creators of Tornado Cash] learned that the Lazarus gang was laundering hundreds of millions of dollars of stolen virtual currency through their mixer service, the founders of Tornado Cash continued to develop and promote the service and did not take meaningful steps to reduce its use in illegal purposes,” said U.S. Deputy Secretary of the Treasury Wally Adeyemo.
“By publicly claiming to offer a technically sophisticated privacy service, Storm and Semyonov actually knew they were helping hackers and scammers hide the fruits of their crimes,” said Attorney Damian Williams. “Today’s allegations are a reminder that money laundering through cryptocurrency transactions is against the law and those who engage in such laundering will be held accountable.”
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One of the founders of Tornado Cash mixer Roman Storm was released on bail. This was announced by his lawyer Brian Klein.
“I am pleased to announce that my client Roman Storm has already been released on bail,” said Brian Klein.
He added that he remains "very disappointed" that prosecutors charged Storm "with helping to develop software."
“Their new theory has dangerous implications for all software developers,” he added.
Let me remind you that back on August 8, 2022, the US Office of Foreign Assets Control (OFAC) stated that in total, more than $ 7 billion was laundered through Tornado Cash, created in 2019, and its operators could not or did not want to enter " effective controls designed to prevent money laundering on a regular basis.”
As a result, sanctions were imposed against the mixer service: all property and property interests of Tornado Cash (located in the USA or owned or controlled by persons from the USA) turned out to be blocked, they now need to be reported to OFAC. Also, US citizens and others in the United States are no longer able to do business with Tornado Cash without special permission from OFAC. In addition, any organizations that are directly or indirectly owned by such people by 50 percent or more were also "banned".
The authorities claimed that the sanctions were due to the fact that funds stolen by hackers as a result of the Harmony hack (about $ 96 million) passed through Tornado Cash, funds received as a result of the compromise of the Ronin blockchain, which is closely associated with the popular NFT game Axie Infinity (more than 600 million dollars, 455 million was laundered through the mixer), as well as about 7.8 million dollars received during the compromise of the Nomad cryptocurrency bridge.
As now reported by the US Department of Justice, one of the founders of the mixer, 34-year-old Roman Storm, was arrested last Wednesday in the state of Washington, where he lives. The other defendant, 35-year-old Roman Semyonov, a Russian citizen, remains at large. The Office of Foreign Assets Control has announced sanctions against Semyonov for providing support to the North Korean government.
Storm and Semyonov are believed to have founded Tornado Cash in 2019 with Aleksey Pertsev, who was arrested in the Netherlands last August on money laundering charges.
Both men are charged with conspiracy to commit money laundering and conspiracy to violate the International Economic Emergency Powers Act. The maximum penalty for each of these charges is 20 years in prison.
Also, the founders of Tornado Cash are accused of conspiring to run an unlicensed money transfer business, and the maximum penalty in this case is up to five years in prison.
“Even after [the creators of Tornado Cash] learned that the Lazarus gang was laundering hundreds of millions of dollars of stolen virtual currency through their mixer service, the founders of Tornado Cash continued to develop and promote the service and did not take meaningful steps to reduce its use in illegal purposes,” said U.S. Deputy Secretary of the Treasury Wally Adeyemo.
“By publicly claiming to offer a technically sophisticated privacy service, Storm and Semyonov actually knew they were helping hackers and scammers hide the fruits of their crimes,” said Attorney Damian Williams. “Today’s allegations are a reminder that money laundering through cryptocurrency transactions is against the law and those who engage in such laundering will be held accountable.”
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One of the founders of Tornado Cash mixer Roman Storm was released on bail. This was announced by his lawyer Brian Klein.
“I am pleased to announce that my client Roman Storm has already been released on bail,” said Brian Klein.
He added that he remains "very disappointed" that prosecutors charged Storm "with helping to develop software."
“Their new theory has dangerous implications for all software developers,” he added.
