Tornado Cash's Storm arrested by FBI, Semenov added to sanctions list

Tornado Cash co-founder Roman Storm has been arrested while fellow co-founder Roman Semenov added to a list of individuals and companies subject to have their assets blocked and prohibited from doing business with U.S. persons.

The U.S. Department of the Treasury's Office of Foreign Assets Control, or OFAC, announced Wednesday that Semenov has been added to its Specially Designated Nationals list of sanctioned companies and individuals.

Meanwhile, the U.S. Department of Justice, or DOJ, said it had charged Storm and Semenov with "conspiracy to commit money laundering, conspiracy to commit sanctions violations, and conspiracy to operate an unlicensed money transmitting business."

The Federal Bureau of Investigation and the Internal Revenue Service arrested Storm on Wednesday, OFAC said while Semenov remains at large, according to the DOJ.

"Tornado Cash has been used to launder funds for criminal actors since its creation in 2019, including to obfuscate hundreds of millions of dollars in virtual currency stolen by Lazarus Group hackers," OFAC said in a statement. The sanctions were coordinated with the help of the DOJ, the statement also said.

The update to OFAC's list of sanctioned entities also included several ether wallet addresses and specifically mentioned North Korean sanctions regulations.

They eight wallet addresses sanctioned have processed more than $11.5 million in various crypto assets, according to blockchain analytics firm Elliptic Connect.

OFAC's SDN list

"OFAC publishes a list of individuals and companies owned or controlled by, or acting for or on behalf of, targeted countries," according to the office's website.

"Collectively, such individuals and companies are called 'Specially Designated Nationals' or 'SDNs.' Their assets are blocked and U.S. persons are generally prohibited from dealing with them," the website also states.

Roughly a year ago, OFAC designated Tornado Cash as well as an ecosystem of linked wallets, saying that bad actors including North Korea’s Lazarus group had used the platform to launder more than $7 billion.

Tornado Cash is an open-source software that can be used to anonymize transactions on the Ethereum blockchain.

In June, the Blockchain Association called the U.S. Treasury Department’s decision to sanction Tornado Cash “unprecedented and unlawful." Those that oppose the sanctions have said the government overstepped its authority by targeting software, rather than an individual or entity, among other issues.