According to the latest publications, Roman Semenov, one of the co-founders of the Tornado Cash cryptocurrency “mixer,” was added to the United States Office of Foreign Assets Control’s (OFAC) database of Specially Designated Nationals and Blocked Persons (SDN) on August 23.
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FBI and IRS Caught Tornado Cash Co-founders
The Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigation division detained yet another co-founder, Roman Storm on the same day in Washington state.
Storm and Semenov Knew they were Aiding Hackers
In accordance with the press release issued by the Justice Department (DOJ), U.S. Attorney Damian Williams for the Southern District of New York stated: “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.”
Tornado Cash Co-founders Face Series Time
In a statement released on Wednesday, Semenov and Storm have been charged for engaging in laundering money, participation in sanctions violations, and attempting to operate an unregistered financial-transmitting company. The maximum sentence for both of the first two offenses is a total of twenty years in jail. The charge for financial transmission carries a maximum five-year prison sentence.
Sanctions Against Crypto Mixers
The OFAC imposed sanctions against Tornado Cash in August of last year as a result of the laundering of nearly $7 billion. This punishment came in line with the executive order that US President Joe Biden agreed upon, which forbids the practice of laundering money.
As reported by TheCoinRise, the arrest of Alexey Pertsev, one of the Tornado Cash creators, reportedly generated such a commotion in the cryptocurrency community that Coinbase opted to support a class-action suit against the Department to defend customers who were subjected to the restrictions. After the penalties were imposed, the regulator issued guidelines stating that it is not unlawful to access Tornado Cash’s open source code, putting aside concerns that the sanctions might restrict that.
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