The US Department of Justice (DOJ) is confronting the developers of Tornado Cash, a notable entity in the cryptocurrency realm, with serious allegations. Roman Storm had requested the dismissal of the indictment that accuses them. However, the court rejected their request to dismiss the charges. So, what are they accused of?
What Is the DOJ Accusing Tornado Cash Founders Of?
The DOJ charges the Tornado Cash developers with conspiring to launder money, operating an unlicensed money transmitting business, and violating sanctions law. Specifically, it is alleged that North Korea’s Lazarus Group and similar criminal organizations laundered funds through the crypto mixer. These allegations have sparked a series of debates within the crypto community.
As highlighted in Tornado Cash’s advertisement, the platform uses “breakthrough, surveillance-free technology based on strong cryptography to allow you to send Ethereum cryptocurrency 100% anonymously!” This claim now falls under the shadow of these serious allegations.
Violations of Sanctions Are Noted
In a court filing on Friday, the DOJ stated that the project’s founders and developers had abandoned control capabilities and defined the crypto mixer Tornado Cash as a money transmitter. This means transferring fixed amounts of customer deposits, thereby violating sanctions. It is noted that the developers are accused of conspiring to operate the service.
The defense claims that the developers lost control and did not have access to prevent criminal organizations from using the service. However, the DOJ argues that merely developing code for a project does not equate to operating an organization that launders money.
Tornado Cash Co-Founder Still on the Run
While Roman Storm prepares for his court appearance in September 2024, co-founder and developer Semenov remains at large. Storm was arrested by the Federal Bureau of Investigation (FBI) and the Internal Revenue Service (IRS) and was charged in August 2023.
As the developers of Tornado Cash face these charges, they ignite a serious debate about how the legal framework for cryptocurrency will shape up and what the future holds for similar projects. In the coming days, we will see the outcome of these debates. However, issues related to sanction violations are particularly hotly pursued in the US, with the country making significant moves to enforce compliance.
