The North Korean Lazarus Group, along with other parties, reportedly used Tornado Cash as a means to launder their funds, according to recent allegations. In September 2023, Roman Storm was arrested but was quickly released on a $2 million bail. However, the US Department of Justice (DOJ) has opposed the attempt to dismiss charges of conspiracy and money laundering against Roman Semenov, the co-founder of Tornado Cash. The DOJ argues that presenting contested facts for jury consideration is not appropriate in the early stages of the case, as the defense has done in its submission.
In response, the prosecution presented its case for holding Roman Semenov accountable for the charges. The DOJ challenged the defense’s portrayal of Tornado Cash, pointing out that it was established in 2019 as a cryptocurrency mixer. The service consists of a user interface, smart contracts, a network of “relayers,” and a website.
The DOJ has charged both Roman Storm and Roman Semenov with conspiracy to launder money, operating an unregistered money transmitter, and violating sanctions through their creation of Tornado Cash. Additionally, US officials claim that the Lazarus Group and others also used Tornado Cash to launder their funds.
Roman Storm, after pleading not guilty to all allegations, was released on bail. However, his lawyers argued in March that the government had no basis to accuse him and requested that the case be dropped. On the other hand, while Semenov acknowledges his involvement in designing the code, he denies responsibility for its implementation.
Furthermore, Semenov’s legal team argues that Tornado Cash is not a financial institution and does not function as a custodial mixing service. They state that Storm had no control over the utilization of the service by groups like the Lazarus Group.
In other cryptocurrency news, a former Grayscale director has predicted a drop in Bitcoin’s price to $52,000.