The co-founders of Tornado Cash are accused by the Ministry of Justice
Date: 2023-08-24 Author: Karina Ziganova Categories: BUSINESS, IN WORLD
The US Department of Justice (DOJ) announced charges against two people who co-founded Tornado Cash on August 23.
The agency released an indictment accusing Roman Storm and Roman Semenov of various offenses related to the creation, operation and promotion of Tornado Cash, a once popular Ethereum-based coin mixer that concealed cryptocurrency transactions.
U.S. Attorney Damian Williams said:
“By publicly claiming to offer a technically sophisticated privacy service, Storm and Semyonov actually knew they were helping hackers and scammers hide the fruits of their crimes.”
The Justice Department also noted that Tornado Cash handled $1 billion in criminal proceeds and laundered funds on behalf of North Korean cybercriminal groups.
The agency's full list of allegations against the two co-founders of Tornado Cash include conspiracy to commit money laundering, conspiracy to commit sanctions violations, and conspiracy to operate an unlicensed money transfer business.
The Justice Department said Storm has been arrested in Washington State and will face trial, while Semyonov has yet to be found or arrested.
The US Treasury Department has separately announced sanctions against Semyonov, which will prohibit other parties from doing business with him. The department noted that those who make deals with Semyonov can be identified themselves.
The third developer, Alexey Pertsev, was arrested in the Netherlands in August 2022. The Ministry of Justice today did not announce the charges against Pertsev. The Ministry of Finance mentioned Pertsev's past arrest, but did not announce sanctions against him (or against Storm).
The Treasury previously sanctioned the faucet
The Treasury initially sanctioned Tornado Cash in August 2022, effectively banning basic access to the coin mixer.
However, Tornado Cash continued to operate due to its decentralized nature and reliance on cryptocurrencies. The platform has even survived other trials: Tornado Cash's control system was hacked in May 2023, resulting in less than $1 million in theft. Control coin holders later regained control thanks to a new proposal.
Data from DefiLlama suggests that Tornado Cash remains active with a total value locked (TVL) of $245 million compared to an all-time high TVL of $1.1 billion.
