Hours after the DOJ announced that OpenSea’s former product manager Nathan Chastain would be sentenced to three months in prison, it just announced another major indictment — this time, against the crypto mixing service, Tornado Cash.
And for its two founders, ominous clouds loom, signaling an impending storm.
On Wednesday, Roman Storm, 34, and Roman Semenov, 35, the founders of the Russian cryptocurrency mixer platform Tornado Cash, were charged with laundering over $1 billion through its platform, according to a newly unsealed indictment.
Tornado Cash has an unfortunate history of serving as the instrument and tool to helping scramble the location of stolen funds and then distributing them across many wallets, without any way to trace where it originally came from.
In April and May 2022, Tornado Cash’s service was allegedly used by (the now sanctioned) North Korean cybercrime organization, Lazarus Group, to launder hundreds of millions of dollars in hacking proceeds.
Storm was arrested on Wednesday in the state of Washington and the case has been assigned to U.S. District Judge Katherine Polk Failla – however, Semenov remains at large.
“While publicly claiming to offer a technically sophisticated privacy service, Storm and Semenov in fact knew that they were helping hackers and fraudsters conceal the fruits of their crimes. Today’s indictment is a reminder that money laundering through cryptocurrency transactions violates the law, and those who engage in such laundering will face prosecution,” said U.S. Attorney Damian Williams.
Williams also spearheaded efforts in bringing OpenSea’s Nathan Chastain to justice, in what the U.S. Department of Justice considers to be “the first-ever digital asset insider trading scheme.”
In addition to three months of home confinement and three months of community service, Chastain will also have to disgorge approx. $26,000 (15 ETH) and a $50,000 penalty equivalent to the amount he profited from the illicit trading of NFTs.
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