The United States has officially pressed charges against two co-founders of the cryptocurrency mixer, Tornado Cash, accusing them of money laundering and other offenses. This action comes a year after authorities prohibited the Russian-founded platform due to its alleged association with North Korean hackers.
Roman Semenov and Roman Storm now face charges of conspiracy to commit money laundering, conspiracy to commit sanctions violations, and conspiracy to operate an unlicensed money-transmitting business, according to a statement released by the US Department of Justice on Wednesday.
Storm, a naturalized US citizen, has been apprehended in Washington state, while Semenov, a Russian national, remains at large. Another co-founder, Alexey Pertsev, was arrested in the Netherlands last August on money laundering charges.
Tornado Cash, which was placed under US treasury sanctions last year, is accused by US officials of enabling more than $1 billion in money laundering transactions and laundering hundreds of millions of dollars for Lazarus Group, a hacking entity linked to North Korea’s nuclear weapons program.
“US Attorney Damian Williams emphasized, “While publicly claiming to offer a technically sophisticated privacy service, Storm and Semenov, in fact, knew that they were helping hackers and fraudsters conceal the fruits of their crimes.”
The indictment serves as a reminder that cryptocurrency-related money laundering is against the law and individuals engaged in such activities will face legal consequences.
Furthermore, the US treasury has separately imposed sanctions on Semenov due to his alleged ties to Lazarus Group.
Tornado Cash, launched in 2019, falls under the category of crypto mixing services, allowing cryptocurrency users to obscure the source of their funds by mixing different assets in exchange for a fee. These services cater to both privacy-conscious regular users and criminals attempting to conceal illicit gains.
Critics, including cryptocurrency advocates, have strongly criticized the ban on Tornado Cash, considering it an intrusion into individuals’ legitimate expectations of privacy.
“Brian Klein, legal representative of Roman Storm, expressed disappointment that his client has been charged for contributing to software development and highlighted concerns about the legal implications for all software developers”.
“Klein stated, “Mr. Storm has been cooperating with the prosecutors’ investigation since last year and disputes that he engaged in any criminal conduct. There is a lot more to this story that will come out at trial.”
Legal representatives for Semenov and Pertsev were not immediately available for comment.
