US government accuses founders of cryptocurrency mixer Tornado Cash of laundering $ 1 billion and violating sanctions

The US government has indicted the founders of the sanctioned cryptocurrency mixer Tornado Cash, Roman Storm and Roman Semenov. They are suspected of laundering more than $ 1 billion, in particular for North Korea. According to a press release from the U.S. Department of Justice, the founders of Tornado Cash are charged with conspiracy to create an unlicensed money transfer business.

Prosecutors allege that Storm and Semenov laundered hundreds of millions of dollars for the most notorious North Korean cybercriminals, the Lazarus Group. The FBI has published a list of six cryptocurrency wallets linked to the hacker group.

«Tornado Cash is a well-known cryptocurrency mixer that has violated U.S. sanctions and facilitated more than $ 1 billion in crime-related proceeds,» said U.S. Attorney for the Southern District of New York Damian Williams.

The official added that Roman Semenov and Roman Storm knowingly helped hackers and fraudsters conceal their crimes. In April and May 2022, the Tornado Cash service was probably used by the North Korean organization Lazarus Group. The founders publicly declared compliance with the sanctions, but in private chats they admitted that «changing the mixer would be ineffective.»

Storm and Semenov are charged with conspiracy to commit money laundering and conspiracy to violate the International Emergency Economic Powers Act. The maximum penalty for each charge is 20 years in prison.

The indictment specifies that Roman Storm was detained in the state of Washington. Today, on August 25, he was released on bail. Semenov remains at large, so the charges were brought in absentia.

As a reminder, Tornado Cash is a decentralized cryptocurrency mixer that allows you to hide the source and destination of transactions on the Ethereum network. The protocol was launched in August 2019 by developers Roman Storm, Roman Semenov, and Alexey Pertsev.