The U.S. Department of Justice filed a lawsuit against Roman Storm and Roman Semenov, the two founders of currency mixer Tornado Cash, on Wednesday (23rd), accusing them of facilitating more than $1 billion in money laundering transactions, violating money laundering and sanctions regulations, and allegedly conspiring to operate an illegal business. Licensed funds transmission business.

Roman Storm was arrested in Washington state on Wednesday, while Russian citizen Roman Semenov remains at large, but he and eight Ethereum addresses he controls have been placed on a sanctions list, according to a statement from the Justice Department.

The U.S. Treasury Department imposed sanctions on Tornado Cash last August, banning U.S. citizens from using the service and accusing the platform of laundering more than $7 billion in cryptocurrency since 2019, including by the North Korean hacker group "Lazarus Group" ) stole $455 million.

U.S. Attorney Damien Williams said in a statement on Wednesday that Tornado Cash and its operators "knowingly facilitated" money laundering, noting:

Although Roman Storm and Roman Semenov always claim that Tornado Cash provides advanced privacy services, in fact they all know that they are assisting hackers and fraudsters to conceal the results of their crimes. Today’s indictment is a reminder that money laundering through cryptocurrency transactions is illegal and those who engage in such money laundering will face prosecution.

According to the indictment of the U.S. Department of Justice, Roman Storm and Roman Semenov designed Tornado Cash with various privacy features even though they knew it would be used for illegal activities. The Justice Department stated that they could have implemented transaction monitoring or other functions to prevent money laundering on Tornado Cash, but the two men have repeatedly publicly stated that they have no control over Tornado Cash, and at the same time have been operating and controlling the service in private .

The complaint also frequently mentions another co-founder, developer Alexey Pertsev, who was arrested in the Netherlands last year and is awaiting trial on money laundering charges. The U.S. Department of Justice alleges that the three founders of Tornado Cash created a tool that could be used to track deposits and withdrawals, but the tool did not collect any anti-money laundering or customer information. The complaint reads:

The defendants and Alexey Pertsev realized that they had not incorporated KYC or AML mechanisms as required by law, so they made misleading public statements in an effort to minimize their ownership and control of Tornado Cash, and their rights to Tornado Cash Operation of the Service. They expect to gain lucrative business from it.

This article has 1 person arrested and 1 person on the run! The post Tornado Cash’s two founders were charged with violating money laundering and sanctions regulations first appeared on Blockchain.