Tornado Cash Co-Founder Freed on Bail

Roman Storm – one of the co-founders of the crypto mixer Tornado Cash – is no longer detained, currently being out on bail.

The US authorities arrested the individual earlier this week over allegations that his entity facilitated money laundering operations and was involved with the North Korean hacking collective – the Lazarus Group.

‘Disappointed With the Arrest’

Roman Storm’s attorney – Brian Klein – revealed that his client is out on bail (without disclosing the amount of money posted for the release). He shared his disappointment with the detention, saying Storm aided the advancement of a software. In addition, he believes the US prosecutors’ “novel legal theory” could impact the operations of all software developers. 

Pleased to share that my client Roman Storm is already out on bail, although I remain very disappointed that the prosecutors charged him because he helped develop software – their novel legal theory has dangerous implications for all software developers.https://t.co/elmU8VqpYq

— Brian Klein (@brianeklein) August 24, 2023

American law enforcement agents arrested Storm on August 23, accusing him and his associate Roman Semenov (another co-founder of Tornado Cash) of conspiracy to commit money laundering, conspiracy to operate an unauthorized money-transfer business, and conspiracy to violate US sanctions.

Prosecutors also suggested that despite the numerous complaints from hacking victims, the crypto mixer failed to implement know-your-customer (KYC) or anti-money-laundering programs. 

Semenov remains at large with agents at the Federal Bureau of Investigation’s New York field office trying to identify his whereabouts. The US Office of Foreign Assets Control (OFAC) recently added him to its specially designed list of sanctioned people. 

“We’re working with law enforcement, outside and inside of our agency, trying to locate and arrest this individual… We will work whatever avenues — whatever we need to do — to arrest, whether it be domestic or international,” James Smith – assistant director in charge of the FBI’s New York field office – stated.

Alexey Pertsev (the third co-founder of Tornado Cash) also had legal problems. He was detained last summer in Amsterdam shortly after the OFAC imposed sanctions on the crypto mixer for allegedly providing services to the North Korean hacking group – Lazarus. 

The developer spent nine months behind bars since the authorities rejected a bail release. He currently awaits a trial, which will determine whether his entity had a connection with the Pyongyang-based organization. 

What Are the Exact Numbers?

The main allegation against Tornado Cash is that it facilitated more than $1 billion in criminal proceedings over the years, including hundreds of millions of dollars for Lazarus.

Acting Assistant Attorney General – Nicole Argentieri – argued that crypto mixers of this kind have become the “go-to method for criminals to conceal their ill-gotten gains.” 

“The defendants operated Tornado Cash as a safe haven for criminal actors to obfuscate the trail of funds tied to their criminal activities, such as computer hacking and wire fraud,” she added.