U.S. authorities charge the two founders behind the Russian cryptocurrency mixing service Tornado Cash. According to an unsealed indictment the US national Roman Storm and the Russian national Roman Semenov are charged with money laundering and sanctions violations. Allegedly, Tornado Cash facilitated over $1 billion in money laundering transactions. The third co-founder, Alexey Pertsev faces trial in Amsterdam.
According to its website, Tornado Cash was established in 2019, building upon open-source research by the Zcash team. In August 2022, OFAC sanctioned Tornado Cash for its role in enabling over $7 billion in crypto to be laundered through its platform.
In August of last year, Alexey Pertsev was apprehended in Amsterdam following the OFAC sanctions on Tornado Cash. His arrest marked an unprecedented occurrence – Pertsev’s involvement wasn’t directly tied to any specific criminal activity. Rather, he was taken into custody for his role in coding the coin mixer, which authorities allege has enabled money laundering. After being released on April 26, he now faces trial for his alleged involvement in facilitating money laundering through digital assets.
The U.S. indictment asserts that the defendants laundered hundreds of millions of dollars for the Lazarus Group, a North Korean cybercrime organization subject to sanctions. While Roman Storm was arrested in Washington and is set to appear in the U.S. District Court for the Western District of Washington, Roman Semenov remains at large.
Claiming to offer the Tornado Cash service as a “privacy” service, the defendants in fact know that it was a haven for criminals to engage in large-scale money laundering and sanctions evasion. Indeed, as the defendants well knew, a substantial portion of the funds the Tornado Cash service processed were criminal proceeds passed through the Tornado Cash service for purposes of concealment.
US indictment against Tornado Cash founders (link)
U.S. Attorney Damian Williams stated, “As alleged, Tornado Cash was an infamous cryptocurrency mixer that laundered more than $1 billion in criminal proceeds and violated U.S. sanctions. Roman Storm and Roman Semenov allegedly operated Tornado Cash and knowingly facilitated this money laundering.“
The indictment outlines Storm and Semenvo’s alleged orchestration of Tornado Cash as a cryptocurrency mixer, enabling untraceable transfers. They reportedly failed to comply with legal requirements for know-your-customer and anti-money laundering programs, leading the mixer to launder more than $1 billion in criminal proceeds. The indictment details how the defendants knowingly facilitated sanctions-violating transactions and continued to operate the service despite awareness of its illegal activities.
