According to the indictment, Semenov and Storm developed the Tornado Cash crypto-mixer, which operates on the Ethereum network and allows confidential mixing of tokens and covering their tracks. The developers of the service face charges of conducting unlicensed activities, conspiracy to launder money, and conspiracy to launder money, specifically for the North Korean hacker group Lazarus. Each of the suspects faces up to 20 years in prison. Storm is currently in custody. Semenov and the eight Ethereum addresses he allegedly controls have been sanctioned.
U.S. Attorney Damien Williams said the cryptomixer developers knowingly facilitated money laundering. Storm and Semenov were aware that they were helping hackers and fraudsters to hide the traces of crimes.
For his part, Storm’s attorney Brian Klein of Waymaker LLP said the case is based on a “novel legal theory.” The prosecutor’s office filed the charges because of the software assistance. This legal theory has dangerous consequences for all developers.