Tornado Cash Developers Charged with Money Laundering and Sanctions Violations by US Govt

• "The charges in the Indictment arise from the defendants’ alleged creation, operation, and promotion of Tornado Cash, a cryptocurrency mixer that facilitated more than $1 billion in money laundering transactions and laundered hundreds of millions of dollars for the Lazarus Group, the sanctioned North Korean cybercrime organization," DOJ stated.
• "In a statement, U.S. Attorney Damien Williams said Tornado Cash and its operators "knowingly facilitated" money laundering."

"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. Today’s indictment is a reminder that money laundering through cryptocurrency transactions violates the law, and those who engage in such laundering will face prosecution," U.S. Attorney Damien Williams said.

• According to the indictment, Storm and Semenov designed Tornado Cash with various privacy features despite knowing that their service would be used for illicit purposes.
• "Moreover, the DOJ alleged they maintained control over Tornado Cash, which they could have used to implement transaction monitoring or other anti-money laundering features, despite publicly saying they could not actually control it."
• "The indictment also makes frequent references to Alexey Pertsev, another co-founder, who was arrested last year in the Netherlands, where he currently awaits trial on money laundering allegations."

"The DOJ further alleged that the defendants knew their service was being used to launder funds from hacks and other thefts, seeming to reference the KuCoin and BitMart hacks from 2020 and 2021, respectively. A later section walked through the Axie Infinity Ronin Bridge hack," CoinDesk wrote.

• "Employees representing the exchanges had reached out to the developers, but they declined to "offer any assistance," the filing said."
• "Wednesday's arrests come barely a week after a federal judge ruled that crypto investors' and developers' rights had not been infringed by OFAC sanctioning Tornado Cash."

"The DAO is an entity unto itself that, through its voting members, has demonstrated an agreement to a common purpose. As the government notes, the structure is not unlike that of stockholders of a corporation who may not intend to vote in a shareholder meeting, without this affecting the structure of the entity," the judge wrote.

CoinDesk Article / Archive
Indictment PDF / Archive
DOJ PR / Archive
Treasury PR / Archive