CryptoMix Innovator's Legal Battle Unfolds

Martin Walker
Aug 27, 2023 at 09:55 am

Roman Storm, a co-founder of Tornado Cash, a crypto mixing platform, has been released on bail after being detained by US authorities. The arrest took place this week following accusations that his platform was involved in facilitating money laundering and had connections with the Lazarus Group, a North Korean hacking collective.

'Arrest Outcome Sparks Disappointment'

Expressing his dissatisfaction with the arrest, Roman Storm's lawyer, Brian Klein, remarked on his client's contribution to software development and raised concerns about the potential impact of the US prosecutors' unconventional legal approach on software developers as a whole.

On August 23, Storm was apprehended by American law enforcement agents on charges including conspiracy to commit money laundering, unauthorized money-transfer business operation, and violation of US sanctions. His associate, Roman Semenov, who is another co-founder of Tornado Cash, is still being sought by the Federal Bureau of Investigation's New York field office.

Prosecutors emphasized that despite numerous complaints from hacking victims, Tornado Cash had failed to implement standard compliance measures like know-your-customer (KYC) and anti-money-laundering programs.

The third co-founder, Alexey Pertsev, encountered legal issues as well. He was arrested in Amsterdam last summer, shortly after the US Office of Foreign Assets Control (OFAC) imposed sanctions on Tornado Cash for allegedly aiding the Lazarus hacking group. Pertsev has been in custody for nine months due to denied bail, awaiting a trial to determine the extent of his entity's involvement with the Lazarus Group.

What Are the Precise Figures?

The central accusation against Tornado Cash is that it facilitated over $1 billion in illicit transactions, including substantial amounts directed towards Lazarus. Acting Assistant Attorney General, Nicole Argentieri, argued that crypto mixing platforms have become a preferred method for criminals to obscure the origins of their unlawfully obtained funds.

Argentieri further stated, "The defendants turned Tornado Cash into a refuge for criminals seeking to conceal the flow of funds associated with illegal activities, such as hacking and fraudulent transactions."

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