Founders of Tornado Cash accused of laundering $1 billion

The US government has brought charges against the founders of the cryptocurrency mixer Tornado Cash, Roman Storm and Roman Semenov. They are suspected of laundering more than $1 billion in money, including for North Korea.

According to a press release from the US Department of Justice, the founders of Tornado Cash are accused of conspiring to create an unlicensed money transmitting business.

Prosecutors allege that Storm and Semenov laundered hundreds of millions of dollars for the North Korean cybercrime organization Lazarus Group. The FBI has published a list of six wallets associated with the hacking group.

“Tornado Cash is a notorious cryptocurrency mixer that violated U.S. sanctions and facilitated the receipt of more than $1 billion in crime-related funds,” said Damian Williams, U.S. Attorney for the Southern District of New York.

The prosecutor added that Roman Semenov and Roman Storm deliberately helped hackers and scammers hide their crimes. In April and May 2022, the Tornado Cash service was allegedly used by the North Korean organization Lazarus Group. The founders publicly declared compliance with the sanctions, but admitted in private chats that “changes to the mixer would be ineffective,” the source said.

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 is 20 years in prison, according to a press release from the US Department of Justice.

The indictment states that Roman Storm was detained in Washington state. He is expected to appear in court at a later date. Semyonov remains at large, so charges were brought in absentia.

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.

In August 2022, the US government banned the use of the Tornado Cash mixer. A few days later, the creator of Tornado Cash, Alexey Pertsev, was detained in Amsterdam. He was charged with concealing criminal financial flows and money laundering. In April 2023, it became known that Pertsev could be released under house arrest.