- Tornado Cash co-founder Roman Storm has pleaded not guilty to money laundering charges following his recent arrest
- Storm and co-founder Roman Semenov face charges related to the use of Tornado Cash by North Korean hacking groups
- The US government faces a challenge over what some perceive to be a sanctioning of code, which is against the US constitution
Tornado Cash co-founder Roman Storm has pleaded not guilty to money laundering charges brought in the wake of his arrest last month. Storm and his co-founder Roman Semenov were indicted on several charges due to the use of the mixing service by North Korean hacking groups, while Semenov was also included in the Office of Foreign Assets Control’s (OFAC) list of specially designated nationals. Storm appeared at a New York District Court on Wednesday over the charges but denied them and was released on a $2 million bond with his passport seized.
Arrest Followed Appeal Rejection
Tornado Cash was sanctioned last August for its involvement in enabling criminal groups to launder money, with Semenov and Storm accused of facilitating the laundering of over $1 billion in illicit funds through the platform. This move came hot on the heels of a rejection of the appeal against OFAC’s initial sanctions. Numerous US agencies, including the US Attorney for the Southern District of New York, US Attorney General Merrick Garland, the FBI, and the IRS’ criminal division, collaborated in the investigation.
Semenov and Storm have been charged with various offenses, including conspiracy to commit money laundering, conspiracy to commit sanctions violations, and conspiracy to operate an unlicensed money-transmitting business. Semenov was described in court as a “fugitive overseas”:
Judge: Will you image thr devices?
AUSA: Some are encrypted. We have material from Dutch authorities, in Russian, from CC-1. Multiple terabytes.
Judge: What about the co-defendant?
AUSA: He’s a fugitive overseas.
Judge: Victims?
AUSA: Yes, of the hacks.— Inner City Press (@innercitypress) September 6, 2023
US Attorney Damian Williams emphasized at the time of the indictments that Storm and Semenov were fully aware that they were aiding hackers and fraudsters in concealing the proceeds of their criminal activities, potentially subjecting them to severe penalties if found guilty.
The Treasury clarified at the time that the US government’s aim was to disrupt illicit financial activities, preserve the integrity of the financial system, and safeguard the virtual currency ecosystem, but critics have argued that the sanctioning of code is a breach of the US Constitution.
