The U.S. The Attorney’s Office for the Southern District of New York said on Wednesday that they have filed charges against the two founders of Tornado Cash, a Russian service for mixing different types of cryptocurrency.
Roman Storm and Roman Semenov, the two founders, have been officially charged with multiple crimes. Among these charges are conspiracy to launder money, conspiracy to break sanctions, and conspiracy to run a money transfer business without a license. The accusations are spelled out in the indictment, which was just made public.
Roman Storm was apprehended in Washington on the same day as Roman Semenov, but Semenov is still evading authorities, according to a statement from the SDNY.
It’s important to mention that Alexey Pertsev, a third co-founder not explicitly mentioned in the public filing, is also facing legal matters in Amsterdam due to his association with Tornado Cash.
Customers pay a fee to use mixers to hide where their cryptocurrency funds came from during a transaction. The individual with lawful privacy concerns could employ this process, while it could also hinder attempts to track crypto funds that could potentially be used for unlawful activities.
According to its website, Zcash team research served as the foundation for Tornado Cash’s creation in 2019. In an interview with CoinDesk in January 2022, Semenov talked about how decentralized the platform is. He stated that they designed the protocol to be “unstoppable,” and he also mentioned that the team has limited control over the protocol, making it challenging for them to assist with investigations.
On Wednesday, U.S. Attorney Damian Williams said, “Even though Storm and Semenov told the public they offered a technologically advanced privacy service, they knew they were helping hackers and criminals hide the money they made from their illegal activities.”
The SDNY stated that the charges arise from Tornado Cash’s operation of a platform that allegedly aided in laundering over $1 billion. The Lazarus Group, a cybercrime group based in North Korea, stole more than $455 million, which is how much this amount is. The Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury had already confirmed this information in a statement.
In August 2022, OFAC took action by imposing sanctions on Tornado Cash because its platform was utilized to facilitate the laundering of over $7 billion worth of cryptocurrency. After this, people and businesses in the U.S. could no longer use its service.
Alongside the SDNY, Wednesday’s charges included participation from the Federal Bureau of Investigation, the Justice Department and the Internal Revenue Service’s Criminal Investigation unit.