The Tornado Cash developer is out on bail, but the allegations remain.
Roman Storm, co-founder of Tornado Cash, was released on bail on August 24th, only a day after the arrest.
Storm was charged by the U.S. Attorney’s Office in the Southern District of New York with money laundering and related offenses and was arrested on August 23rd.
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His lawyer, Brian Klein, shared the news on X (formerly Twitter), stating he remains “very disappointed that the prosecutors charged him because he helped develop software.” He added that all software developers could potentially be harmed by such a legal theory.
On August 23rd, the founders of Tornado Cash, a virtual currency mixer, were charged with sanctions violations and laundering more than $1bn in criminal proceeds.
The defendants allegedly knew of the criminal activities of a North Korean hacker group that used their company to launder millions of dollars. Among the charges is the conspiracy to operate an unlicensed money-transmitting business.
The Tornado Cash website has since been removed from the internet.
Despite the charges being aimed at both owners, only Storm was arrested. Roman Semenov, co-owner of Tornado Cash, was included in a list for Specially Designated Nationals and Blocked Persons, essentially facing U.S. sanctions.
According to the statement from the U.S. Attorney's Office, the defendants created Tornado Cash service and profited from it but didn’t implement KYC or anti-money laundering programs in accordance with the law.
As a result, the Tornado Cash service was used to launder more than $1 billion in criminal proceeds. Storm and Semenov knew about these money laundering transactions and received complaints and requests for help from victims of hacking and other cybercrimes.
But Storm’s lawyer argued that “there is a lot more to this story that will come out at trial.”
In 2022, The United States Treasury Department’s Office of Foreign Asset Control (OFAC) sanctioned Tornado Cash itself, alleging that it enabled malicious cyber activities.
