Reported by Elizabeth Lopatto

Photo by Amelia Holowaty Krales / The Verge

Tornado Cash developers Roman Semenov and Roman Storm have been charged with three conspiracy counts in an indictment unsealed today. Storm has been arrested and Semenov remains at large, according to a statement from the Southern District of New York.

Tornado Cash is a so-called “mixer,” a privacy service meant to obscure the trail of ownership for cryptocurrency that passes through it. The mixer “knowingly violated” US sanctions and “laundered more than $1 billion in criminal proceeds,” according to a statement from US Attorney Damian Williams. “While 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.”

The two are charged with conspiracy to commit money laundering, conspiracy to commit sanctions violations, and conspiracy to operate an unlicensed money transmitter. The mixer itself was sanctioned by the US Treasury Department’s Office of Foreign Assets Control last year; today, Semenov was specifically sanctioned by OFAC as well. A third co-founder, Alexey Pertsev, will be tried in the Netherlands and isn’t mentioned by name in the indictment.

The indictment alleges that Tornado Cash was used by North Korea’s Lazarus Group to launder hundreds of millions of dollars. Mixers such as Tornado Cash are also used to launder funds from ransomware, security experts have said.

Read full report: https://www.theverge.com/2023/8/23/23843161/tornado-cash-indictment-conspiracy-north-korea-money-laundering