US Department of Justice accused two founders of the cryptocurrency mixer Tornado Cash, Roman Shtorm and Roman Semenov, in helping criminals (including the North Korean group Lazarus) launder more than $1 billion in stolen cryptocurrencies. Storm was arrested in Washington, and Semyonov was charged in absentia.
Let me remind you that as early as August 8, 2022, the US Office of Foreign Assets Control (OFAC) declaredthat, in total, more than $7 billion was laundered through Tornado Cash, created in 2019, and its operators were unable or unwilling to put in place “effective controls designed to prevent money laundering on a regular basis.”
IA “RBC”, 08/24/2022, “The founders of the Tornado Cash cryptomixer in the USA were accused of laundering $1 billion”: Tornado Cash is a blockchain protocol that runs on the Ethereum network. It allows you to increase the confidentiality of transactions by hiding the connection between the source and recipient of tokens. The service is often used by hackers when withdrawing funds from attacked projects. 49-year-old Russian citizen Semyonov lived in Washington. According to investigators, he, along with 34-year-old Storm from Auburn, created a scheme “designed to help other scammers launder funds using cryptocurrency.” […] “Storm and Semyonov actually knew they were helping hackers and scammers hide the fruits of their crimes,” Damian Williams, U.S. Attorney for the Southern District of New York, said in a report. — Inset K.ru
As a result vs mixer service imposed sanctions: All property and property interests of Tornado Cash (in the US or owned or controlled by US persons) have been blocked and must now be reported to OFAC. Also, US citizens and others in the United States are no longer able to do business with Tornado Cash without special permission from OFAC. In addition, any organizations that are directly or indirectly owned by such people by 50 percent or more were also “banned”.
Hacker.Ru, 08/15/2022, “The developer of Tornado Cash was arrested in the Netherlands”: In fact, an autonomous smart contract was included in the sanctions list (which now raises a lot of questions from lawyers), and the website, forum, Discord server and even the Tornado Cash GitHub repository have stopped working. — Inset K.ru
The authorities said that the sanctions were due to the fact that funds stolen by hackers as a result of Hack Harmony (about $ 96 million), funds received as a result of the compromise of the Ronin blockchain, which is closely related to the popular NFT game Axie Infinity (was stolen more than 600 million dollars455 million were washed through the mixer), as well as about 7.8 million dollars received during compromises cryptocurrency bridge Nomad.
As now reported by the US Department of Justice, one of the founders of the mixer, 34-year-old Roman Storm, was arrested last Wednesday in the state of Washington, where he lives. The other defendant, 35-year-old Roman Semyonov, a Russian citizen, remains at large. Office of Foreign Assets Control announced sanctions against Semyonov, which were imposed for providing support to the North Korean government.
IA “RBC”, 08/25/2022, “The arrested developer of the cryptomixer Tornado Cash Storm was released on bail”: Arrested developer of cryptomixer Tornado Cash Roman Shtorm released from custody on bail, reported on social network X (formerly Twitter, blocked in Russia) by his lawyer Brian Klein. […] “I am pleased to announce that my client Roman Shtorm has already been released on bail, although I am very disappointed with the prosecution of the prosecutors [в отмывании денег], given that he was only engaged in software development, ”the lawyer said in a statement. Storm has been cooperating with authorities as part of the investigation since 2022 and has denied committing any criminal acts, Klein said earlier in a comment. to Bloomberg. — Inset K.ru
Storm and Semyonov are believed to have founded Tornado Cash in 2019 with Aleksey Pertsev, who was arrested in the Netherlands last August on money laundering charges.
Both men are charged with conspiracy to commit money laundering and conspiracy to violate the International Economic Emergency Powers Act. The maximum penalty for each of these charges is 20 years in prison.
Also, the founders of Tornado Cash are accused of conspiring to run an unlicensed money transfer business, and the maximum penalty in this case is up to five years in prison.
“Even after [создатели Tornado Cash] learned that the Lazarus group was laundering hundreds of millions of dollars of stolen virtual currency through their mixer service, the founders of Tornado Cash continued to develop and promote the service and did not take meaningful steps to reduce its use for illegal purposes, ”says Deputy Secretary of the Treasury Wally Adeyemo (Wally Adeyemo).
“By publicly claiming to offer a technically sophisticated privacy service, Storm and Semyonov actually knew they were helping hackers and scammers hide the fruits of their crimes,” said Attorney Damian Williams. “Today’s allegations are a reminder that money laundering through cryptocurrency transactions is against the law and those who engage in such laundering will be held accountable.”
@CorruptionTV, 25.08.2022 12:47: I am reading the materials of the criminal case of two Romanovs (Shtorm and Semenov), who created Tornado Cash, a popular mixing platform for exchanging, and often laundering, crypto stolen by hackers. Both are from Russia. Roman Storm graduated from South Ural State University and then moved to the USA, where he worked as a programmer for a long time.
In correspondence with accomplices, with whom Roman created the site, he writes: “We must remember that secret (private) chats in the application (most likely meaning Telegram) are read by law enforcement agencies and can then be used against us.” Of course, the FBI read these chats and knew how they laundered the money of hacker groups. “The mice cried, pricked, but continued to gnaw on the cactus.” The question is rather rhetorical, how does the FBI get access to secret Telegram chats? — Inset K.ru