The US authorities have charged two founders of Tornado Cash cryptocurrency mixer with money laundering, sanctions violations and operating an illegal business.
According to the indictment, Roman Storm, 34, of Auburn, Washington, and Roman Semenov, 49, of Russia created, operated, and promoted the Tornado Cash cryptocurrency mixing service used by cybercrooks to launder criminal proceeds.
In August 2022, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on Tornado Cash for allegedly helping to launder more than $7 billion worth of cryptocurrency since its creation in 2019, including $455 million stolen by a North Korean state-sponsored threat actor known as Lazarus Group. That same month, the Dutch authorities arrested a suspected developer of Tornado Cash.
The US Department of Justice said that Storm and Semenov were two of the three founders of Tornado Cash. Together with their accomplices they allegedly created the core features of the service, promoted it and paid for critical infrastructure to operate the service.
The authorities said that the service operated without implementing know-your-customer or anti-money laundering policies as required by law and, as a result, was used to launder more than $1 billion in criminal proceeds.
“Storm and Semenov allegedly knew about these money laundering transactions and received complaints and requests for help from victims of hacking and other cybercrimes. However, they refused to implement any controls and continued to operate the Tornado Cash service and facilitate these money laundering transactions,” the DoJ said.
Storm was arrested on August 23 in Washington. Semenov, who reportedly resides in Dubai, remains at large. Also, the Russian co-founder of Tornado Cash, has been added to the US OFAC's Specially Designated Nationals (SDN) List.
Both men were charged each with one count of conspiracy to commit money laundering, one count of conspiracy to violate the International Economic Emergency Powers Act, and conspiracy to operate an unlicensed money-transmitting business. They could face up to 45 years in prison if convicted.