Breaking: Tornado Cash developers arrested and charged with laundering more than $1 billion


  • Tornado Cash developers have been arrested for laundering over $1 billion for the notorious Lazarus Group.
  • Tornado cash is infamously known as a mixing service to increase the anonymity of users’ transactions.
  • The US Department of Justice (DOJ) participated in the sanction, unsealing an indictment against two Tornado Cash principals.

Tornado Cash developers Roman Storm and Roman Semenov have been arrested on money laundering charges. Citing Deputy Secretary of the Treasury Wally Adeyemo on the matter:

Even after they knew the Lazarus Group was laundering hundreds of millions of dollars worth of stolen virtual currency through their mixing service for the benefit of the Kim regime, Tornado Cash’s founders continued to develop and promote the service and did not take meaningful steps to reduce its use for illicit purposes.

The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) has sanctioned one of the three co-founders, Roman Semenov, claiming that the Russian materially aided Tornado Cash mixing service and the infamous Lazarus Group.

The Lazarus Group is notorious for hacking, with alleged ties to the Democratic People’s Republic of Korea (DPRK).

Exploiters and hackers use Tornado Cash, touted as a virtual mixer, to launder their loot. As such, the service is mainly used by criminals. A paragraph from the official statement by the US Department Of The Treasury reads:

Tornado Cash has been used to launder funds for criminal actors since its creation in 2019, including obfuscating hundreds of millions of dollars in virtual currency stolen by Lazarus Group hackers.

The US Department of Justice (DOJ) participated in the sanction, unsealing an indictment against two Tornado Cash principals, Semenov and Roman Storm. The Federal Bureau of Investigation (FBI), in collaboration with the Internal Revenue Service (IRS), arrested Storm on August 23.

The DOJ is charging the two principals for:

  • Conspiracy to commit money laundering
  • Conspiracy to operate an unlicensed money-transmitting business, and
  • Conspiracy to commit sanctions violations

A third player in the mix, Alexey Pertsev, also a principal, was arrested on similar charges in the Netherlands by Dutch law enforcement. This happened in August 2022, but he was released around April 21 to await trial at home.

The move is a warning about possible clampdown against projects offering "mixing" services for crypto to the public, placing them on the DOJ's radar.

During Pertsev's arrest last year, questions were raised about whether it was ideal to arrest a code developer, especially considering the open-source Tornado Cash software. 

Supposing there is any solidity to this line of thought, then it would pass as a possible threat against developing Web3 projects, whose products could be leveraged by criminals locally or internationally. 


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Join Telegram

Recommended content


Recommended Content

Editors’ Picks

Chainlink social dominance hits six-month peak as LINK extends gains

Chainlink social dominance hits six-month peak as LINK extends gains

Chainlink social dominance surged to a six-month peak on Friday as LINK holders increased their activity. LINK traders started taking profits, on-chain data trackers show. LINK price added 6% on Friday, extending its gains from mid-week.

More Chainlink News

Binance helps Taiwan crack a virtual asset money laundering case, BNB sustains above $570

Binance helps Taiwan crack a virtual asset money laundering case, BNB sustains above $570

Binance’s Financial Crimes Compliance (FCC) department joined forces with Taiwan’s Ministry of Justice and helped resolve a case of money laundering worth NT$200 million, or $6.2 million. 

More Binance News

Bitcoin Weekly Forecast: Is BTC out of the woods? Premium

Bitcoin Weekly Forecast: Is BTC out of the woods?

Bitcoin price shows signs of continuing its uptrend, providing a buying opportunity between $64,580 to $63,095. On-chain metrics forecast a bullish outlook for BTC ahead. If BTC clears $70,000, the chances of resuming the uptrend would skyrocket.

More Bitcoin News

XRP trades steady at $0.50 as Ripple shares plan to expand services in Africa

XRP trades steady at $0.50 as Ripple shares plan to expand services in Africa

Ripple hovers close to $0.51 on Friday, above the psychologically important $0.50 level, as traders await the court ruling of the lawsuit against the US Securities and Exchange Commission and amid new commitments from the firm to expand its services in Africa. 

More Ripple News

Bitcoin: Is BTC out of the woods? Premium

Bitcoin: Is BTC out of the woods?

Bitcoin (BTC) price action in the past two days has confirmed the resumption of the bull run. However, BTC needs to clear a few key hurdles before investors can go all-in. 

Read full analysis

BTC

ETH

XRP