Roman Storm, a co-founder of Tornado Cash, has been released on bail, as confirmed by his attorney, Brian Klein. This information was shared through an update on X (formerly referred to as Twitter). Both Roman Storm and his fellow co-founder, Roman Semenox, had been apprehended on allegations of laundering a sum exceeding $1 billion, alongside violations related to sanctions. While Storm has been granted bail, there is no available information regarding Semenox’s current status.
Klein expressed his dissatisfaction with the fact that Storm was accused of creating the software underpinning Tornado Cash, a move he believes carries concerning implications for all software developers. In addition to the money laundering charges, the two co-founders also face accusations of participating in a scheme to operate an unlicensed money-transmitting business.
How Do Authorities View Mixing Platforms Like Tornado Cash?
A cryptocurrency mixer operates by blending digital tokens within a common pool, thereby preventing the tracing of transactions. Its original purpose was to maintain the anonymity of investor dealings. Mixers obscure the origins of funds, a function that safeguards the privacy of users. Nevertheless, while mixers are advantageous for preserving personal information, they can also be exploited for the purpose of money laundering. This dual nature has caused governmental entities to express apprehension.
Notable groups like Lazarus from North Korea have managed to pilfer vast amounts of cryptocurrency, amounting to billions of dollars. These entities frequently utilize platforms such as Tornado Cash to erase their digital tracks. Consequently, the pursuit of such groups by authorities is unsurprising. The founders of Tornado Cash stand accused of engaging in money laundering activities, purportedly having assisted the sanctioned North Korean cybercrime organization, Lazarus Group, in cleansing “hundreds of millions of dollars.”