The Department of Justice (DOJ) has opposed the charges against Roman Semenov, co-founder of Tornado Cash, by filing a motion to dismiss. The defense’s argument that the accused did not update the protocol to exclude sanctioned addresses was addressed by the DOJ. The court considered the defense’s tactic of presenting facts early on as a means to rule in favor of the accused.
The DOJ’s response outlines the allegations against Semenov, analyzing his accountability for the alleged offenses. According to the DOJ, Tornado Cash, described by the defense as a mixer app used to conceal crypto transactions, was developed in 2019. The service includes a dedicated website, user interface, smart contracts, and relayers to enable transmission.
The DOJ accuses Semenov and his fellow developer, Storm, of money laundering, operating without a money transmitting license, and violating sanctions by creating Tornado Cash. It is alleged that Lazarus North Korea used Tornado Cash for money laundering purposes. Storm pleaded not guilty to all charges in September 2023 and was released on a $2 million bond.
One of the key restrictions imposed on Storm is a travel ban in certain areas of New York, New Jersey, Washington, and California. However, Storm’s lawyers attempted to dismiss the indictment in March, arguing that there were no grounds for charging him with a crime. Semenov clarified that he was only responsible for the code design and not the functioning of the tool.
Semenov’s lawyers presented Tornado Cash as a non-profit mixing service that does not meet the criteria of a traditional financial institution. They argued that Storm had no control over who used the service, including the Lazarus Group and other criminals. The prosecution strongly held Storm accountable for operating the cryptocurrency, which suggests that the US government is emphasizing the threat of crypto mixers.
In a separate incident, the founder and CEO of Samourai Wallet, Keonne Rodriguez, and the chief technology officer, William Hill, were arrested and charged with conspiracy to commit money laundering. The maximum sentence for this offense is 20 years, while the maximum sentence for conspiracy to operate an unlicensed money-transmitting business is 5 years. The arrest of the Samourai Wallet founders prompted discussions about the link between mixing services and criminal activities, with some arguing that they are not primarily associated with crime.
