Developer Denies Charges of Money Laundering
As a crypto reader, you should know that Tornado Cash developer Roman Storm has entered a plea of ‘not guilty’ in response to charges of money laundering exceeding $1 billion. These charges include allegations tied to a cybercrime group associated with the North Korean government and violations of US sanctions.
Storm, a naturalized US citizen and co-founder of the controversial coin mixer, was released on a $2 billion bond shortly after his arrest in August.
Not Guilty Plea Entered by Developer
In an update by Inner City Press, it was reported that Storm pleaded “not guilty” before US District Judge Katherine Polk Failla in Manhattan. The charges against him include conspiracy to commit money laundering, conspiracy to commit sanctions violations, and conspiracy to operate an unlicensed money-transmitting business. Storm’s alleged co-conspirator and fellow developer, Roman Semenov, also faces indictment.
If convicted, both Storm and Semenov could potentially face up to 20 years in prison.
The Tornado Cash developers have faced criticism from authorities, with the Office of Foreign Assets Control (OFAC) highlighting the coin mixer’s involvement in facilitating the laundering of funds for criminal actors since its establishment in 2019. This includes the obfuscation of hundreds of millions of dollars in digital assets stolen by North Korea’s Lazarus Group.
Prosecutors have also revealed that Tornado Cash failed to implement any know-your-customer (KYC) or anti-money-laundering (AML) measures, despite receiving multiple complaints from hacking victims.
Uncertain Future for Tornado Cash Co-Founders
Following his bail, Storm’s travel has been significantly restricted, limiting him to specific areas in New York, New Jersey, Washington, and California. He remains under house arrest at his Washington residence and is subject to regular drug testing. Additionally, Storm is prohibited from possessing firearms and contacting any co-defendants, witnesses, or alleged victims.
Meanwhile, Semenov remains at large and has recently been added to the US Department of the Treasury’s Office of Foreign Assets Control’s (OFAC) Specially Designated Nationals list of sanctioned individuals and companies.
The third co-founder of Tornado Cash, Alexey Pertsev, was arrested by Dutch authorities on similar charges related to money laundering with the Lazarus Group. He was released in April 2023, pending trial, and is currently under electronic monitoring at his residence.
Hot Take
The legal battle surrounding the Tornado Cash developers highlights the ongoing need for robust regulatory measures within the cryptocurrency industry. As cryptocurrencies continue to gain popularity, it is crucial for developers and platforms to prioritize compliance with anti-money laundering and know-your-customer protocols. This case serves as a reminder that authorities are closely monitoring cryptocurrency activities and will take action against those involved in illicit practices. As a crypto reader, it’s important to stay informed about the legal implications and potential risks associated with various crypto projects.
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