Crypto firm Tornado Cash founders charged with laundering over $1 billion

Roman Storm and Roman Semenov, founders of Russian cryptocurrency firm Tornado Cash, have been charged with laundering more than $1 billion in illicit funds.

The indictment, recently unveiled and made public, alleges that both Storm and Semenov engaged in money laundering activities, including breaching sanctions, through their involvement with Tornado Cash.

The charges assert that substantial sums, exceeding hundreds of millions of dollars, were directed to the Lazarus Group, a North Korean hacking group sanctioned by the international community.

The indictment brings forth a trio of charges against the founders. These include conspiring to commit money laundering, violating sanctions and operating an unlicensed money-transmitting business. While Storm was apprehended on Wednesday in Washington state, the Justice Department's statement indicates that Semenov, a citizen of Russia, remains at large.

James Smith, assistant director in charge of the FBI’s New York field office, said the agency is determined to track down Semenov. "We're treating this like any other fugitive now," Smith remarked in an interview with CNBC. "We're working with law enforcement, outside and inside of our agency, trying to locate and arrest this individual... We will work whatever avenues - whatever we need to do - to arrest, whether it be domestic or international."

Alexey Pertsev, the third co-founder, isn't implicated in this particular legal action. However, he faces a separate trial in Amsterdam concerning his involvement with Tornado Cash.

US Attorney Damian Williams said, "Roman Storm and Roman Semenov allegedly operated Tornado Cash and knowingly facilitated this money laundering.

"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."

Brian Klein, Storm's legal representative and a partner at Waymaker LLP, conveyed his disappointment regarding the charges. He maintained that the prosecutors' decision was founded on a unique legal premise with potential repercussions for software developers at large.

Klein asserted, "Mr. Storm has been cooperating with the prosecutors’ investigation since last year and disputes that he engaged in any criminal conduct. There is a lot more to this story that will come out at trial."