Tornado Cash co-founders charged by DOJ; one sanctioned by U.S. Treasury while the other arrested by FBI

The U.S. Department of Justice (DOJ) announced charges against two individuals who co-founded Tornado Cash on Aug. 23.

The agency unsealed an indictment charging Roman Storm and Roman Semenov with various wrongdoings related to creating, operating, and promoting Tornado Cash — a once-popular Ethereum-based coin mixer that obscured crypto transactions.

U.S. Attorney Damian Williams said:

“While publicly claiming to offer a technically sophisticated privacy service, Storm and Semenov in fact knew that they were helping hackers and fraudsters conceal the fruits of their crimes.”

The DOJ further noted that Tornado Cash handled $1 billion in criminal proceeds and laundered funds on behalf of North Korean cybercrime groups.

The agency’s complete list of charges against the two Tornado Cash co-founders includes conspiracy to commit money laundering, conspiracy to commit sanctions violations, and conspiracy to operate an unlicensed money-transmitting business.

The DOJ said that Storm has been arrested in Washington State and will be presented in court, while Semenov has not yet been located or arrested.

The U.S. Treasury separately announced sanctions against Semenov, an action that will prohibit other parties from transacting with him. The agency noted that those who transact with Semenov may be designated themselves.

A third developer, Alexey Pertsev, was arrested in the Netherlands in August 2022. The DOJ did not announce charges against Pertsev today. Treasury mentioned Pertsev’s past arrest but did not announce sanctions against him (or against Storm).

Treasury previously sanctioned mixer

The Treasury initially imposed sanctions on Tornado Cash in August 2022, effectively banning mainstream access to the coin mixer.

However, Tornado Cash continued to operate due to its decentralized nature and reliance on cryptocurrency. The platform has even survived other trials: Tornado Cash’s governance system was notably hacked in May 2023, leading to a theft of less than $1 million. Governance coin holders later regained control through a new proposal.

Data from DefiLlama suggests that Tornado Cash remains active with $245 million in total value locked (TVL), down from its all-time high TVL of $1.1 billion.

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