DoJ Charges Tornado Cash Founders with Money Laundering and Sanctions Violations
Treasury Adds Roman Semenov To Specially Designated Nationals List
By: Owen Fernau •DeFi News
The government isn’t done with Tornado Cash, a mixing protocol that allows users to obfuscate the flow of digital assets.
The U.S. Department of Justice has charged two of the three founders of Tornado Cash, Roman Storm and Roman Semenov, with money laundering and sanctions violations. Each charge carries a maximum sentence of 20 years in prison.
According to the release, Storm was arrested in the state of Washington today while Semenov remains at large.
“As alleged, when it became clear that a sanctioned North Korean cybercrime organization was using the platform to launder hundreds of millions of dollars derived from cyber heists, Storm and Semenov turned a blind eye to the illicit activity and made public representations that they were compliant with sanctions laws,” said James Smith, an assistant director at the FBI.
In addition to charging the two founders, the U.S. Treasury has also added Semenov to its sanctions list.
The Office of Foreign Assets Control (OFAC) administers and enforces sanctions against over 10,000 individuals and organizations. U.S. citizens are prohibited from transacting with any entity on the Specially Designated Nationals (SDN) list.
OFAC added Tornado Cash to the sanctions list in August 2022. At the time, OFAC asserted that the protocol had been used to launder over $7B of digital currency, including $455M by the North Korean hacking group known as Lazarus.
The news comes after Dutch authorities imprisoned another member of the Tornado Cash team, Alexey Pertsev, last year. The saga of Pertsev’s detention brought up many questions about whether writing open-source code could be considered a legally punishable offense.
OFAC has listed eight Ethereum addresses purportedly linked to Semenov in the sanctions announcement. His account on Github was suspended last year.