- The DOJ argues against dismissing charges against Tornado Cash co-founder Roman Semenov, citing jury-worthy disputed facts.
- Tornado Cash, labeled a crypto mixer, allegedly used by groups like North Korea’s Lazarus Group for money laundering.
- Semenov’s defense argues he did not control the service’s use, challenging the characterization as a financial institution.
The Department of Justice (DOJ) has presented a strong opposition to a motion that would dismiss charges against Roman Semenov, co-founder of the crypto-mixing service Tornado Cash. The prosecutors maintain that the complexities of the case present issues that should be decided by a jury, particularly at this early stage of the proceedings.
Legal Entanglements Deepen
Roman Semenov, along with his fellow developer Roman Storm, faces serious allegations from the DOJ, including conspiracy to commit money laundering and operating an unlicensed money transmitting business. The authorities claim that Tornado Cash, which began in 2019, has been utilized by nefarious entities such as North Korea’s Lazarus Group to launder money through its network of smart contracts and relayers.
In September 2023, co-founder Storm pleaded not guilty to all charges and was subsequently released on a $2 million bond. He faces travel restrictions across several states including New York, New Jersey, Washington, and California. Despite these charges, Storm’s defense pushed for the dismissal of the indictment in late March, arguing that the government lacked sufficient grounds for the charges.
Semenov’s Defense and Prosecutorial Response
Semenov’s defense has pivoted around the argument that Tornado Cash operates autonomously without custodial oversight, and therefore does not fit the traditional mold of a financial institution that could exercise control over its uses. They assert that Semenov’s role was limited to the technical creation of the code, and he should not be held responsible for the actions of those who misuse the technology.
Countering this, the prosecution led by Damian Williams has articulated that Semenov’s involvement in developing Tornado Cash directly contributed to its use as a tool for criminal anonymity. They have also criticized the founders for not making sufficient efforts to block sanctioned entities from using the service.
