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Tornado Cash Developers Charged with $1B Money Laundering

Tornado Cash Money Laundering
By Nicolo Finazzi
Nicolo Finazzi

2 Min

August 24, 2023
  • Tornado Cash developers Storm and Semenov charged with money laundering and sanctions violations.
  • Allegations involve $1B in transactions, which include North Korea's Lazarus Group.
  • The platform's decentralized nature complicates regulatory enforcement.

The U.S. Department of Justice (DOJ) has charged the developers behind Tornado Cash, a decentralized cryptocurrency mixing service, with money laundering and sanctions violations. Roman Storm and Roman Semenov, two of the co-founders of Tornado Cash, are accused of creating, operating, and promoting the platform, which facilitated more than $1 billion in transactions. The mixing service attempts to obscure the origin of cryptocurrency transactions, allowing users to exchange cryptos anonymously.

The charges stem from allegations that the Tornado Cash platform was utilized for money laundering. This includes moving funds for North Korea's Lazarus Group, a sanctioned cybercrime organization. Additionally, the platform was already under sanctions imposed by the US Treasury Department's OFAC last year. Sanctions were due to the involvement in laundering funds from multiple cryptocurrency hacks.

Storm has been arrested in Washington, while Semenov, a Russian national, remains at large. The third co-founder, Alexey Pertsev, is already facing legal consequences in the Netherlands over his involvement in the company.

Tornado Cash, which claimed to offer a privacy service, allegedly knew it was being used for illicit purposes, but the developers maintained control over it. Once again, the indictment emphasizes that cryptocurrency transactions involving money laundering violate the law and will lead to prosecution.

This case underscores the challenges of regulating decentralized services and highlights the U.S. government's determination to clamp down on illegal activities within the cryptocurrency space.

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