The U.S. Department of Justice hit the founders of Tornado Cash with money laundering charges today, arresting one while the other remains at large.
In a Wednesday indictment, the feds alleged that Roman Storm and Roman Semenov laundered more than $1 billion in criminal proceeds, and charged them with conspiracy to commit money laundering, sanctions violations, and conspiracy to operate an unlicensed money-transmitting business.
Storm was today arrested in Washington state, the indictment said.
“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,” U.S. Attorney Damian Williams said in today’s DOJ announcement.
Acting Assistant Attorney General Nicole M. Argentieri said: “Cryptocurrency mixers have become the go-to method for criminals to conceal their ill-gotten gains.”
Tornado Cash is a popular “coin mixer” app used to anonymously send and receive Ethereum, the second largest digital asset by market cap.
But the Department of the Treasury’s Office of Foreign Assets Control (OFAC) last year banned Americans from using the service, claiming that criminals had used it to launder money—specifically naming the North Korean state-sponsored hacker organization Lazarus Group.
Hackers used the app to launder funds after a $622 million hack on NFT game Axie Infinity’s Ronin bridge last year.
Today’s indictment alleged that Storm and Semenov chose not to implement know your customer (KYC) or anti-money laundering programs as required by law.
It further claims that they operated the app to facilitate hundreds of millions of dollars in further sanctions-violating transactions.
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Source: https://decrypt.co/153481/tornado-cash-money-laundering-charges-arrest-justice-department
