red 
On August 23, 2023, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Roman Semenov – the developer of Tornado Cash – and eight crypto addresses associated with him.
This sanctions activity follows the unsealing of an indictment charging Semenov and another Tornado Cash developer – Roman Storm – with conspiracy to commit money laundering, conspiracy to violate sanctions and conspiracy to operate an unlicensed money transmission business.
In its press release, OFAC identifies Roman Semenov as a Russian national who is one of the three co-founders of Tornado Cash, a decentralized cryptocurrency mixer sanctioned by OFAC on August 8, 2022.
The agency said it imposed sanctions on Semenov “for his role in providing material support to Tornado Cash and the Lazarus group, a state-sponsored hacking group that is an instrument of the Democratic People’s Republic of Korea (DPRK or North Korea).” .
Roman Storm was arrested by the Federal Bureau of Investigation (FBI) and the Internal Revenue Service, Criminal Investigation (IRC-CI), while Semenov remains at large, believed to be in Dubai.
Expanding the network
The enforcement actions against Semenov and Storm follow the arrest of a third Tornado Cash developer – Aleksey Pertsev – who is currently awaiting trial after being arrested in the Netherlands in August 2022 and released on bail in April 2023.
Eight sanctioned addresses handled more than $11.5 million in various cryptoassets, including TORN, Tornado Cash’s management token. Funds from these addresses were moved to different services, including centralized and decentralized exchanges.
Speaking about today’s enforcement action, US Attorney Damian Williams stated: “Roman Storm and Roman Semenov allegedly operated Tornado Cash and knowingly facilitated money laundering.
“While publicly claiming to offer a technically sophisticated privacy service, Storm and Semenov actually knew they were helping hackers and fraudsters hide the fruits of their crimes.”
Tornado Cash
Processing over $7 billion worth of cryptoassets during its operation, Tornado Cash has been used by criminal entities – including the Lazarus Group – to launder over $1.54 billion in illegal cryptoassets.
Within a month of the sanctions, Tornado Cash’s liquidity pools had declined by approximately 60% – reducing its anonymization potential for large-scale money laundering schemes.
Elliptic has identified six prominent Ethereum-based alternative obfuscation protocols that have been mentioned as potentially the next Tornado Cash. To read more about this, check out our Tornado Cash briefing note.
Sanctions Regulators and Government Articles
