Roman Semenov and Roman Storm, the Tornado Cash Founders, a cryptocurrency mixer, now face charges related to their alleged involvement in facilitating the laundering of over $1 billion in illicit funds, some of which were tied to the notorious North Korean hacking group, Lazarus. Storm was arrested by the Federal Bureau of Investigation (FBI) in Washington on Wednesday.
Tornado Cash Founders Faces Charges
According to Finance Magnates, the United States Department of Justice, in a statement released on Wednesday, revealed that it has formally charged the Tornado Cash Founders Semenov and Storm with a laundry list of offenses, including conspiracy to commit money laundering, sanctions violations, and operating an unlicensed money-transmitting business.
According to the authorities, these cryptocurrency executives knowingly turned a blind eye to cries for help from victims of cybercrimes, intentionally failing to implement controls that could have prevented criminals from exploiting their platform to launder cryptocurrencies acquired through illicit means.
Furthermore, the Tornado Cash Founders allegedly provided assistance to the Lazarus Group in laundering “hundreds of millions of dollars in hacking proceeds.” This assistance came despite the fact that the Lazarus Group had been previously sanctioned by the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) and its assets declared as blocked property.
One of Tornado Cash Founders Faces Sanctions Designation
Trading View reported that OFAC has imposed sanctions on one of the Tornado Cash Founders Roman Semenov, adding to the already complicated legal situation surrounding Tornado Cash.
This move effectively freezes Semenov’s assets within the United States and designates him as a security risk to the country. Moreover, it prohibits both US-based and foreign organizations from engaging in any financial transactions with the Co-Founder.
OFAC provided more details on the matter, explaining that the Lazarus Group utilized Tornado Cash to clean over $96 million in funds acquired from the cyberattack on Harmony’s Horizon bridge on June 24, 2022. Additionally, they laundered a minimum of $7.8 million from the Nomad heist on August 2, 2022.
The FBI has traced the theft of over $40 million worth of Bitcoin (BTC) to the Lazarus Group, a hacking outfit with a reputation for audacious cybercrimes. This revelation adds to a growing list of cyberattacks attributed to Lazarus Group, including the theft of $60 million in digital assets from Alphapo, the $37 million stolen from CoinsPaid, and a staggering $100 million heist from Atomic Wallet, all recorded earlier this year.
The charges against the Tornado Cash Founders mark a significant moment in the ongoing struggle to regulate and control the use of cryptocurrencies for illicit activities.