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Tornado Cash co-founders face charges of money laundering and sanctions violations.

Tornado Cash Co-Founders Face Legal Action for Money Laundering and Sanctions Violations.

On August 23, the United States Treasury’s Office of Foreign Assets Control (OFAC) added Roman Semenov,

one of the co-founders of the TornadoCash cryptocurrency “mixer,”

to its list of Specially Designated Nationals and Blocked Persons (SDN).

Simultaneously, Roman Storm, another co-founder, was arrested by the Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigation division in Washington state.

The charges against Semenov and Storm include conspiracy to commit money laundering, conspiracy to commit sanctions violations,

and conspiracy to operate an unlicensed money-transmitting business.

Each of the first two counts carries a maximum sentence of 20 years in prison, while the money-transmitting charge could result in up to five years’ imprisonment.

As of now, Semenov remains at large. It is worth noting that Alexey Pertsev, the third co-founder of Tornado Cash,

was previously arrested in the Netherlands in August 2022 on money laundering charges.

The legal actions against the Tornado Cash co-founders demonstrate the authorities’ commitment to combating illicit financial activities in the cryptocurrency space.

U.S. Attorney for the Southern District of New York Damian Williams said in a statement released by the Justice Department (DOJ):

“As alleged, […] [w]hile 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.”

U.S. Government Escalates Crackdown on Tornado Cash: New Law Enforcement Actions Target Crypto Mixer’s Illicit Activities

U.S. Government Continues Crackdown on Tornado Cash with New Law Enforcement Actions.

The recent law enforcement actions are part of an ongoing crackdown by the U.S. government on Tornado Cash,

which originated last year. In August 2022, the Office of Foreign Assets Control (OFAC) targeted 44 USD Coin and Ether addresses associated with Tornado Cash,

effectively restricting U.S. residents from utilizing the service.

OFAC’s decision to sanction Tornado Cash sparked significant controversy within the crypto community.

Coinbase supported a lawsuit filed by six individuals, alleging that the Treasury Department had exceeded its authority in imposing sanctions on the mixer.

Coin Center, an advocacy group, also filed a similar suit.

Additionally, Representative Tom Emmer, a pro-crypto member of the U.S. House of Representatives, expressed concerns in a letter to Treasury Secretary Janet Yellen regarding the actions taken.

The Department of Justice (DOJ) and OFAC specifically cited Tornado Cash’s involvement in laundering funds for the Lazarus Group, a North Korean-linked hacking group that is also on the SDN list.

However, Tornado Cash has been implicated in various other hacks as well.

The DOJ alleges that the mixer has facilitated the laundering of over $1 billion in illicit proceeds.

These developments underscore the government’s determination to combat money laundering and illicit activities associated with cryptocurrencies, particularly those involving TornadoCash.

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