Shortly after the Department of Justice (DOJ) revealed that Nathan Chastain, OpenSea’s former product manager, would face a three-month prison sentence, another significant development emerged. This time, the focus shifted to the crypto mixing service Tornado Cash, as the DOJ announced a major indictment against its founders, Roman Storm and Roman Semenov.
For Storm and Semenov, the founders of Tornado Cash, the future seems uncertain, with potential challenges on the horizon.
The two founders, Roman Storm (34) and Roman Semenov (35), who established the Russian cryptocurrency mixer platform Tornado Cash, are now facing charges related to laundering more than $1 billion through their platform, as unveiled by a recently unsealed indictment.
Tornado Cash’s history has been marred by its role in aiding the obfuscation of stolen funds, distributing them across multiple wallets, effectively erasing their origin.
Allegedly, Tornado Cash’s services were employed by the North Korean cybercrime organization, Lazarus Group, to launder substantial amounts of hacking proceeds during April and May of 2022, a move that led to subsequent sanctions.
In a significant development, Roman Storm was apprehended in Washington state, while Roman Semenov remains at large, prompting a continued pursuit by authorities.
U.S. Attorney Damian Williams emphasized that while Tornado Cash promoted a privacy service, its founders were well aware that they were aiding hackers and fraudsters in concealing their illegal gains. Williams noted that today’s indictment serves as a reminder that cryptocurrency-based money laundering is illegal and those involved will face prosecution.
Williams also played a pivotal role in prosecuting Nathan Chastain from OpenSea for what the U.S. Department of Justice labels as “the first-ever digital asset insider trading scheme.” Chastain has been sentenced to three months of home confinement, three months of community service, and must forfeit approximately $26,000 (15 ETH) along with a $50,000 penalty reflecting his illicit NFT trading gains.
Attorney General Merrick B. Garland stressed that these charges should act as a warning for those attempting to employ cryptocurrencies to hide their crimes and identities, including the operators of cryptocurrency mixers. The Justice Department remains resolute in its determination to uncover and hold accountable those who misuse cryptocurrency for illegal activities.
The FBI’s ongoing efforts to dismantle crypto-based structures exploited by criminals to launder money demonstrate their commitment to protecting investors and consumers. FBI Director Christopher A. Wray sent a clear message to criminal organizations worldwide, asserting that they cannot hide behind digital anonymity. He stated that the FBI will continue to dismantle cybercriminal infrastructure and hold those who assist criminals responsible.
Both founders, Roman Storm and Roman Semenov, are facing charges of conspiracy to commit money laundering and conspiracy to violate the International Economic Emergency Powers Act. Each charge carries a maximum prison sentence of 20 years. Additionally, both founders have been charged with conspiracy to operate an unlicensed money transmitting business, with a potential maximum sentence of five years in prison.