- The funds laundered through Tornado Cash exceed $1 billion
- Storm was arrested in Washington, but Semenov is still at large
Russian national Roman Semenov and Washington executive Roman Storm, two founders of the privacy mixer Tornado Cash, have been charged with laundering hundreds of millions of dollars for North Korean hackers, CNN reported, citing a federal indictment unsealed in the Southern District Court of New York.
The laundered funds exceed $1B
The funds allegedly laundered through Tornado Cash by Semenov and Storm exceed $1 billion. A large part of that went to the North Korean cybercrime group Lazarus.
Privacy mixers conceal a transfer’s origins before sending funds to the recipient. US Attorney Damian Williams commented that the alleged perpetrators knew they “were helping hackers and fraudsters conceal the fruits of their crimes.”
Storm was arrested in Washington, but Semenov is still at large. The latter has also been sanctioned by the Treasury and the US Department of Justice.
The third co-founder of Tornado Cash – Russian software developer Alexey Pertsev – was arrested on money laundering charges in the Netherlands in August last year. He is now out on bail and awaits sentencing from home.
Attorney: We are incredibly disappointed
Storm’s attorney Brian Klein stated:
We are incredibly disappointed that the prosecutors chose to charge Mr. Storm because he helped develop software, and they did so based on a novel legal theory with dangerous implications for all software developers. Mr. Storm has been cooperating with the prosecutors’ investigation since last year and disputes that he engaged in any criminal conduct.
Tornado Cash is the best-known privacy mixer in the crypto market, but it’s not the only one. Earlier this year, Bankless Times reported that Ameen Soleimani, a former developer of Tornado Cash, was working on a new mixing tool. It is called Privacy Pools, runs on Ethereum, and its code became available on GitHub on March 5.
No KYC implemented
The DA accused the Tornado Cash founders of not implementing Know Your Customer or anti-money laundering measures as required by law. Allegedly, Lazarus Group used the privacy mixer in April and May 2022 in violation of US sanctions.
According to the indictment, Storm and Semenov continued to facilitate the illegal transfers thereafter. Both have been charged with conspiring to commit money laundering and conspiring to violate the International Economic Emergency Powers Act. If found guilty, they face a maximum sentence of 40 years in prison.
