Tornado Cash Co-Founders Charged with Money Laundering
OFAC has added Roman Semenov, a co-founder of crypto mixer Tornado Cash, to its list of “specially designated nationals.” Semenov’s known email addresses and Ethereum wallets were also recorded. Another co-founder, Roman Storm, was detained by the FBI and IRS and both are facing charges of money laundering, operating an unauthorized money-transfer business, and violating sanctions. According to the Deputy Secretary of the Treasury, Semenov and Storm allegedly laundered stolen crypto on behalf of the Lazarus Group, connected to North Korea’s Kim Jong Un. Semenov’s blacklisting followed a judge’s decision to sanction Tornado Cash as a company. Coin Center argues that the indictment lacks sufficient evidence of clear violations of the law, noting that the activities of the co-founders align more with anonymizing software providers rather than money transmitters.
Key Points:
- OFAC adds Roman Semenov, co-founder of Tornado Cash, to its list of “specially designated nationals.”
- Roman Storm, another co-founder, is detained by the FBI and IRS.
- Both co-founders face charges of money laundering, operating an unauthorized money-transfer business, and violating sanctions.
- Semenov and Storm are accused of laundering stolen crypto on behalf of the Lazarus Group, connected to North Korea.
- Tornado Cash was sanctioned by OFAC in 2022 for aiding in the laundering of stolen crypto assets.
Hot Take
The charges against the Tornado Cash co-founders highlight the growing scrutiny on cryptocurrency and its potential use for illicit activities. While the indictment lacks sufficient evidence according to Coin Center, it underscores the need for clearer regulation and guidance on the classification of crypto-related activities. As the crypto space evolves, it is crucial for regulators to strike a balance between combating illegal activities and fostering innovation and privacy in the industry.
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