Tornado Cash founders charged with money laundering

• DOJ has arrested Storm and is on the lookout for Semenov.
• Tornado Cash was used in several crypto heists last year.
• OFAC had sanctioned Tornado Cash in August of 2022.

Co-founders of Tornado Cash – a fully decentralised crypto mixer based out of Russia – have been charged with money laundering, as per an indictment unsealed today.

Tornado Cash laundered money for the Lazarus Group

Roman Semenov and Roman Storm allegedly laundered over $1.0 billion in total, of which, hundreds of millions of dollars they did for a sanctioned North Korean hacking unit – the Lazarus Group.

The U.S. Department of Justice arrested Storm on Wednesday and is on the lookout for Semenov. According to James Smith – an Assistant Director of the FBI:

We’re treating this like any other fugitive now. We’re working with law enforcement, outside and inside of our agency, trying to locate and arrest this individual.

Alexey Pertsev – the third co-founder of Tornado Cash was not included in the aforementioned joint action. He does face trial in the Netherlands, though.

Tornado Cash was used in multiple crypto heists last year

Note that OFAC – the Office of Foreign Assets Control had sanctioned Tornado Cash last year in August.

On Wednesday, the financial intelligence and enforcement agency also sanctioned Semenov as well as the eight Ethereum addresses allegedly under his control. Damian Williams – the U.S. Attorney for the Southern District of New York said today:

While publicly claiming to offer a technically sophisticated privacy service, Storm and Semenov knew they were helping hackers and fraudster conceal the fruits of their crimes.

According to Elliptic – a blockchain analytics company, the $100 million that a U.S. startup Harmony lost to theft in June were laundered via Tornado Cash.