Roman
Semenov and Roman Storm, the Founders of Tornado Cash, a cryptocurrency mixer,
have been charged with helping criminals, including hackers linked to North
Korea-linked Lazarus Group, to launder over $1 billion in illicit funds. Storm
was arrested today (Wednesday) in Washington by the Federal Bureau of
Investigation (FBI).
A
cryptocurrency mixer, also known as a tumbler, is a service utilized by digital asset holders to maintain the anonymity of their cryptocurrency transactions. These
tumblers blend potentially traceable crypto assets with large amounts of
other funds.
The US
Department of Justice in a statement released on Wednesday noted that it charged Semenov
and Storm with conspiracy to commit money laundering, sanctions violations, and to operate an
unlicensed money-transmitting business. According to the law enforcement
agency, the executives received complaints and calls for help from victims of
cybercrimes but deliberately avoided implementing any controls to stop using criminals from using its platform to launder illicitly obtained cryptocurrencies.
Furthermore,
the Founders through
their platforms allegedly helped Lazarus Group “to launder hundreds of millions
of dollars in hacking proceeds,” despite the fact that the hacking group had
been sanctioned by the US Department of the Treasury’s Office of Foreign Assets
Control (OFAC) as blocked property.
“Storm and
Semenov allegedly knew that the Tornado Cash service they were operating was
engaging in these sanctions-violating transactions,” US prosecutors explained.
“They implemented a change in the service so they could make a public
announcement that they were compliant with sanctions, but in their private
chats they agreed that this change would be ineffective.”
US Hits Roman
Semenov with Sanctions
Designation
Separately,
OFCA on Wednesday issued a sanctions
designation against
Semenov, thereby following up on a similar sanction placed on Tornado Cash last year.
The
designation means that Semenov’s assets in the United States are blocked, and
he is considered detrimental to the country’s security. The label also bars US-based
and foreign organizations from engaging in financial transactions with the Co-Founder.
Last year,
OFCA issued its first sanctions against
a cryptocurrency mixer. The financial…
