Tornado Cash Founders “Knowingly Facilitated” Money Laundering Says Federal Prosecutor

• Tornado Cash founders Roman Storm and Roman Semenov were charged with money laundering and sanctions violations.
• U.S. Attorney Damien Williams said developers knew their technology was used to launder at least $1 billion in illicit profits.
• The Treasury Department’s Office of Foreign Asset Control (OFAC) sanctioned Tornado Cash last over links to North Korea’s Lazarus Group.
• Developer Alex Pertsev was arrested by Dutch police last year and later released on home arrest after nine months.

The founders of OFAC-sanctioned crypto Tornado Cash face charges over $1 billion in illicit wealth allegedly laundered through the crypto tumbler.

Roman Storm and Roman Semenov were arrested following charges of money laundering and sanctions violations as the U.S. continues its crackdown on crypto businesses and decentralized financial tools.

Semenov in particular was added to the Treasury Department’s Office of Foreign Asset Control (OFAC) SDN list featuring “Specially Designated Nationals and Blocked Persons”. The OFAC also sanctioned eight Ethereum addresses owned by the founder.

Tornado Cash which allows users to anonymize crypto transactions on the Ethereum network was blacklisted by U.S. authorities last year. The U.S. linked to DeFi platform to the state-funded hacker group Lazarus in North Korea.

On Tuesday, U.S. Attorney Damien Williams wrote that Tornado Cash developers were aware that criminals laundered hundreds of millions of stolen funds through their crypto obfuscating service.

While publicly claiming to offer a technically sophisticated privacy service, Storm and Semenov in fact knew that they were helping hackers and fraudsters conceal the fruits of their crimes.

The indictment signals prosecution for actors who knowingly violate U.S. laws by laundering money through cryptocurrencies, Attorney Williams added.

Tornado Cash Caught In US Storm

In addition to charges against Tornado Cash founders and massive money laundering charges, developer Alexey Pertsev was arrested by Dutch police for his involvement in the project. Pertsev spent nine months in detention before his release on home arrest.