Tornado Cash co-founder released on bail

Storm’s lawyers said the U.S. attorney’s “novel legal theory has dangerous implications for all software developers.”

Roman Storm, one of the co-founders of cryptocurrency mixer Tornado Cash, is no longer in custody and is currently out on bail.

U.S. authorities arrested the individual earlier this week, charging his entity with facilitating money laundering and involvement with the North Korean hacking group Lazarus Group.

“disappointed with the arrest”

Roman Storm’s attorney, Brian Klein, said his client was released on bail for an undisclosed amount. He expressed disappointment at being detained, saying Storm helped the software advance. Additionally, he argued that U.S. Attorneys’ “novel legal theory” could affect the operations of all software developers.

Happy to report that my client, Roman Storm, has been released on bail, although I’m still very disappointed that prosecutors charged him for helping to develop software. Their novel legal theory is critical to all software developers. Both have dangerous effects. — Brian Klein (@brianeklein) August 24, 2023

U.S. law enforcement officers arrested Storm on Aug. 23 and charged him and his associate Roman Semenov (another Tornado Cash co-founder) with conspiracy to launder money, conspiracy to operate an unauthorized money transmission business, and conspiracy to violate U.S. sanctions .

Prosecutors also said that despite numerous complaints from hack victims, the cryptocurrency mixer failed to implement know-your-customer (KYC) or anti-money laundering programs.

Semenov remains at large, and agents with the FBI’s New York field office are trying to locate him. The U.S. Office of Foreign Assets Control (OFAC) recently added him to a specially designed sanctioned list.

James Smith, assistant director in charge of the FBI’s New York field office, said, “We’re working with law enforcement inside and outside our agency to try to find and apprehend this individual. Whether domestically or internationally.”

Alexey Pertsev (the third co-founder of Tornado Cash) also ran into legal problems. He was detained in Amsterdam last summer shortly after OFAC imposed sanctions on cryptocurrency mixers suspected of providing services to the North Korean hacking group Lazarus.

The developer has spent nine months behind bars since authorities refused bail. He is currently awaiting a trial that will determine whether his entity has ties to the Pyongyang-based group.

**What is the exact number? **

The main charge against Tornado Cash is that it facilitated more than $1 billion in criminal proceedings over the years, including hundreds of millions of dollars for Lazarus.

According to Acting Assistant Attorney General Nicole Argentieri, such cryptocurrency mixers have become “the method of choice for criminals to hide their ill-gotten gains.”

She added, “Defendants used Tornado Cash as a safe haven for criminals to obfuscate the tracing of funds related to their criminal activities, such as computer hacking and wire fraud.”