Prosecutors have charged two key figures behind Tornado Cash, a prominent Russian cryptocurrency-mixing platform, with laundering more than $1 billion in criminal proceeds. A freshly-unsealed indictment alleges that Roman Storm and Roman Semenov are guilty of violating sanctions and transferring money through the service. Storm was apprehended yesterday in Washington while Semenov is still at large.
The two founders of Tornado Cash, a renowned Russian cryptocurrency tumbler, have been charged with laundering over $1 billion in criminal funds. An indictment accusing Roman Storm and Roman Semenov of violating sanctions and laundering money through the service was recently unsealed. This includes hundreds of millions of dollars for the sanctioned North Korean state-backed Lazarus Group. Allegations include conspiring to carry out money laundering, conspiring to breach sanctions, and conspiring to operate an unlicensed money transmitting business. Storm was apprehended in Washington, but Semenov, a Russian native, remains at large. The third co-founder, Alexey Pertsev, is currently on trial in Amsterdam for his involvement with Tornado Cash. In a press statement, the U.S. Attorney Damian Williams stated that Storm and Semenov were “knowingly facilitating this money laundering” and “help[ing] hackers and fraudsters conceal the fruits of their crimes” while blatantly advertising that the mixer was providing anonymous and untraceable transactions. The multi-agency action was undertaken by the FBI, the Justice Department and the Internal Revenue Service's Criminal Investigation unit. OFAC also sanctioned Semenov on Wednesday.
Tornado Cash is used by many people with the purpose of protecting their privacy when trading with cryptocurrencies. When payments are made via crypto wallets, the recipient can access the purchaser's public crypto wallet and see their transaction history. Using the said service masks these details by anonymizing the funds. Unfortunately, Tornado Cash has been linked with a number of high-profile crypto thefts, including a $615 million heist of tokens from Ronin and a $100 million attack on U.S. startup Harmony. Blockchain analytics firm Elliptic uncovered that a total of $1.5 billion in proceeds from criminal actions, such as ransomware, hacks, and fraud, had been laundered through Tornado Cash. Last Thursday, the Treasury Department blacklisted the service as they believed it had been used to launder over $7 billion worth of virtual currency since its inception in 2019. Moreover, blockchain analytic tools have managed to trace funds stolen from Harmony to other ether wallets.
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