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U.S. Justice Department has charged Roman Semenov and Roman Storm, co-founders of the cryptocurrency mixer Tornado Cash, with multiple offenses, including money laundering and breaching sanctions. These actions come after the U.S. administration had prohibited the Russian-based platform a year prior for its purported support to DPRK-associated hackers.
While Storm, a U.S. citizen, was apprehended in Washington, Semenov, who holds Russian citizenship, remains at large. Another key figure in this saga, Alexey Pertsev, the third co-founder, had previously been detained in the Netherlands in August.
It’s alleged that Tornado Cash played a pivotal role in processing transactions exceeding $1 billion, earmarked for money laundering. Furthermore, it’s implicated in laundering several hundreds of millions on behalf of the notorious Lazarus Group. This hacking conglomerate is infamously connected to channeling funds for North Korea’s controversial nuclear pursuits.
In a statement, U.S. Attorney Damian Williams said, “Storm and Semenov, despite their assurances of stringent data security, were acutely aware that they were aiding and abetting criminals in obscuring their illicit gains.”
In a subsequent move, the U.S. Treasury Department has sanctioned Semenov for his apparent nexus with the Lazarus Group.
Established in 2019, Tornado Cash offers services designed to mask the origin of funds. While it’s positioned to serve both ordinary individuals and criminal elements, it has been a magnet for controversy.
Cryptocurrency proponents have voiced their dissent against the clampdown on Tornado Cash, lambasting it as an overreach. Brian Klein, Storm’s legal representative, expressed regret over the charges, labeling them as emanating from “a novel legal standpoint that portends dangerous implications for the developer community.” He further added that Storm has been actively cooperating with investigators for over a year and vehemently denies any culpability in the alleged malfeasance.
Official statements from the representatives of Semenov and Pertsev remain forthcoming.