Roman Semenov, a co-founder of Tornado Cash, is facing conspiracy and money laundering charges; the US Department of Justice (DOJ) has rejected this move. It contended that the defense’s petition, which presented contested facts for the jury to examine, was inappropriate for motions filed at an early stage.
Prosecutors examined why the co-founder of Tornado Cash ought to answer for the charges brought against him in the DOJ’s response. The DOJ refuted the defense’s description of Tornado Cash, pointing out that it was unveiled as a cryptocurrency mixer in 2019. A user interface, a collection of smart contracts, a website, and a network of “relayers” make up the service.
Roman Storm and another developer Roman Semenov were charged by the DOJ with conspiring to launder money, running an unlicensed money transmitter, and breaking sanctions by starting the cryptocurrency-mixing service Tornado Cash. Authorities in the US assert that organizations such as the Lazarus Group in North Korea have laundered money using Tornado Cash.
Shortly after his arrest, in September 2023, Storm entered a not guilty plea to all counts and was sent free on a $2 million bond. His travel is mostly prohibited outside of specific regions of California, Washington, New Jersey, and New York. But in late March, Storm’s lawyers filed a motion to have the indictment dismissed on the basis that there were insufficient charges against Storm. Semenov made it clear that while he helped design the code, he is not responsible for its application.
In their move to dismiss, Semenov’s legal team made clear that Tornado Cash does not function as a custodial mixing service and does not fit the definition of a “financial institution.” They asserted that Storm lacked the authority to stop organizations such as Lazarus Group from utilizing the service.
Prosecutors lead by Damian Williams contended in the document that Semenov was responsible for running the cryptocurrency mixer and charged him with creating tools that helped criminals operate in secret. The co-founders of Tornado Cash came under fire for their insufficient efforts to omit approved addresses. This occurs while the US government is still targeting services that combine cryptocurrency.
Chief technology officer William Hill and CEO Keonne Rodriguez of Samourai Wallet, a cryptocurrency mixer, were detained on April 24 and charged with conspiracy to commit money laundering, a crime that carries a maximum sentence of 20 years, and conspiracy to operate an unlicensed money transmitting business, a crime that carries a maximum sentence of five years.
The CEO of CryptoQuant, Ki Young Ju, responded to the recent arrest of the Samourai Wallet founders by saying that cryptocurrency mixing services are not intrinsically illegal.