NEW YORK – The United States on Wednesday indicted Roman Semenov and Roman Storm, two co-founders of the cryptocurrency mixer Tornado Cash, for their involvement with the banned outfit and related laundering of up to US$1 billion (S$1.35 billion) in criminal proceeds.
Storm, a naturalised US citizen who lives in Washington state, was arrested on Wednesday, while Semenov – a Russian national – is yet to be taken into custody, the US Attorney’s Office in New York said in a statement.
The criminal charges against both men, which include conspiracy to commit money laundering and sanctions violations, come one year after the US Treasury banned Tornado Cash on allegations that it supports North Korea.
The outfit facilitated more than US$1 billion in money laundering transactions and laundered “hundreds of millions of dollars” for North Korean government-linked cybercrime group Lazarus, US officials said.
So-called virtual currency “mixers” take the cryptocurrencies of many users and mash them together to help hide the source and owners of the funds. They have become the “go-to method for criminals to conceal their ill-gotten gains”, Acting Assistant Attorney-General Nicole Argentieri said in a statement.
“The defendants operated Tornado Cash as a safe haven for criminal actors to obfuscate the trail of funds tied to their criminal activities, such as computer hacking and wire fraud,” she added.
Storm’s lawyer Brian Klein said his client “disputes” having engaged in any criminal conduct and had been cooperating with prosecutors’ investigation over the past year.
“We are incredibly disappointed that the prosecutors chose to charge Mr. Storm because he helped develop software, and they did so based on a novel legal theory with dangerous implications for all software developers,” Mr Klein said.
Waymaker Law, the firm representing Storm, did not immediately respond to a request for comment. Neither did the Federal Bureau of Investigation.
A third co-founder of Tornado Cash, named Alexey Pertsev, had been detained by Dutch law enforcement officials on money laundering charges in August 2022.
The Lazarus Group, which was banned by the US in 2019, was using Tornado Cash to launder funds it obtained from several major cybercrimes, and Storm and Semenov “did not take meaningful steps to reduce its use for illicit purposes”, the Treasury statement said.
The sanctions mean the property and interests in property of both founders that are in the US or in control of US people will be blocked, it added. REUTERS
