There is news for the two founders of Tornado Cash, a leading Russian cryptocurrency mixer. Accordingly, they are accused of laundering over $1 billion in illegal funds. The recently announced indictment states that Roman Storm and Roman Semenov violated sanctions. They are also allegedly laundering money through Tornado Cash. The platform is accused of handling hundreds of millions of dollars for Lazarus Group, a sanctioned North Korean hacking group.
Accusations and arrests
The charges against Storm and Semenov include conspiracy to launder money. It also includes enforcement violations and running an unlicensed money transfer business. Storm was caught in Washington state on Wednesday, as confirmed by the Justice Department. Semenov, who is a Russian citizen, is still free. There are also details for a third co-founder, Alexey Pertsev, who is not named in this indictment. He is facing a separate lawsuit in Amsterdam for his role in cryptocurrency mixer Tornado Cash.
Frequently used by some for legitimate privacy protection in the cryptocurrency world, Tornado Cash allows users to anonymize their crypto transactions. However, it has also been linked to high-profile crypto heists, including a major attack on the Axie Infinity network and a US startup Harmony, both of which are affiliated with the Lazarus Group. Blockchain analysis company Elliptic also did research. Accordingly, it is tracking the $1.5 billion in ill-gotten gains through Tornado Cash.
US government response
The US Treasury Department, which previously banned Americans from using Tornado Cash, also sanctioned Semenov after Wednesday’s events. The Treasury stated that criminals have laundered over $7 billion in cryptocurrencies through Tornado Cash since its inception in 2019.
Cryptocurrency mixer Tornado Cash offers privacy-enhancing features. On the other hand, its association with criminal activities has sparked regulatory scrutiny. The cryptocurrency market continues to mature. Also, the balance between privacy and security is becoming more and more important. Arrest and indictment of the founders deters illegal actions in the crypto ecosystem. On the other hand, it highlights the continuing challenges of maintaining legitimate use.
Not blaming the cryptocurrency ecosystem
It would be wrong to directly link the Tornado Cash event to the cryptocurrency industry. There are many well-meaning people in the field. On the other hand, there are those who use the field for their evil purposes.
Bitcoin and cryptocurrencies should not be blamed for malicious purposes. When we look at Kriptokoin.com, it does not mean that the people in the land are bad who take bad elephants.
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