Two founders of Tornado Cash, Roman Storm and Roman Semenov, have been charged with money laundering and sanctions violations. They are accused of laundering over $1 billion in criminal proceeds, including funds for a North Korean hacking group. Storm has been arrested, while Semenov remains at large. The third co-founder, Alexey Pertsev, is facing trial in Amsterdam. The indictment alleges that Storm and Semenov knowingly facilitated money laundering and failed to implement required anti-money laundering programs.
Tornado Cash is a popular cryptocurrency mixer used by some to protect their privacy in the crypto market. It anonymizes funds and conceals the identity of buyers. However, the service has also been implicated in high-profile crypto heists, including the theft of $615 million from Ronin and a $100 million attack on Harmony, both linked to the Lazarus Group. Blockchain analytics firm Elliptic has found that at least $1.5 billion in proceeds from crimes have been laundered through Tornado Cash. The U.S. Treasury previously stated that the service has been used to launder over $7 billion worth of virtual currency since its launch in 2019.
In response to these allegations, the Treasury Department has blacklisted Tornado Cash, targeting the criminals who have used the service for money laundering. Some blockchain analytics tools have been able to trace crypto sent through Tornado Cash to identify the source of the funds. Despite its legitimate uses, the service has become associated with illegal activities in the crypto world.
In conclusion, the founders of Tornado Cash have been charged with laundering over $1 billion in criminal proceeds and violating sanctions. The popular cryptocurrency mixer has been used for both legitimate privacy protection and illicit activities such as high-profile crypto heists. The U.S. Treasury has blacklisted Tornado Cash in an effort to target criminals who have used the service for money laundering. Despite the challenges of tracing funds through the mixer, blockchain analytics firms have been able to identify the source of the funds in some cases.