The once looming dark clouds over Tornado Cash have now transformed into a full-blown tornado. US authorities claim that the developers of the cryptocurrency mixer were involved in money laundering activities. What’s more, the actions of Tornado Cash have also been linked to the infamous Lazarus Group, a hacking group from North Korea.
The US Treasury has imposed sanctions on Roman Semenov, while his business partner and co-founder of the cryptocurrency mixer have been arrested. Interestingly, the blockchain community is strongly protesting against these actions. In defense of Tornado Cash, companies like Coin Center have stepped up, pointing out what they believe to be a flawed understanding of the law.
Roman Storm Arrested on Charges of Money Laundering for Lazarus Group Since last year, it was clear that the sanctions imposed by OFAC on the cryptocurrency mixer were a harbinger of trouble. The loss suffered by investors in court defending Tornado Cash provided the US authorities with a pretext for another offensive. Roman Semenov has been slapped with sanctions, and the second developer, Roman Storm, has been apprehended by the Federal Bureau of Investigation (FBI).
As if that wasn’t enough, the Department of Justice has also accused them of being involved in laundering $1 billion USD. The funds were purportedly sourced from various attacks on cryptocurrency exchanges and protocols. The alleged support for the Lazarus Group, a hacking collective from North Korea, has also been added to the list of charges.
It’s worth noting that the crusade against the cryptocurrency mixer led to the arrest of a third developer, Aleksiej Pertsew, last year. He was released from custody after several months. His arrest took place in the Netherlands.
Cryptocurrency Community Protests and Defends Tornado Cash
The first voices of dissent against the actions of the US authorities emerged in August 2022, following the initial sanctions imposed on the cryptocurrency mixer. Back then, arguments were made that the cryptocurrency mixer is a decentralized protocol.
The current situation has also triggered a plethora of comments, with one of the loudest voices being that of Coin Center.
Peter Van Valkenburgh, the Director of Research, has highlighted the accusations presented in the indictment. According to him, they appear to contradict the guidelines of the American financial crimes enforcement network.
Does this mean that the legal storm over Tornado Cash has a chance of clearing up? The decisive factor will be the coming weeks.
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