U.S. Treasury Department Sanctions Tornado Cash Co-Founder Full Text

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On August 23, the US Department of the Treasury announced the new OFAC SDN sanctions list, including Roman Semenov, the co-founder of Tornado Cash. The announcement shows that his nationality is Russian, he first lived in Dubai, and listed his 8 Ethereum addresses.

email address

semenov.roma@gmail.com；

Alternate email address

semenovroma@gmail.com；

semenov.roman@mail.ru；poma@tornado.cash；

Digital currency address:

ETH 0xdcbEfFBECcE100cCE9E4b153C4e15cB885643193；

Alternate digital currency address:

ETH 0x5f48c2a71b2cc96e3f0ccae4e39318ff0dc375b2；

ETH 0x5a7a51bfb49f190e5a6060a5bc6052ac14a3b59f；

ETH 0xed6e0a7e4ac94d976eebfb82ccf777a3c6bad921；

ETH 0x797d7ae72ebddcdea2a346c1834e04d1f8df102b；

ETH 0x931546D9e66836AbF687d2bc64B30407bAc8C568；

ETH 0x43fa21d92141BA9db43052492E0DeEE5aa5f0A93；

ETH 0x6be0ae71e6c41f2f9d0d1a3b8d0f75e6f6a0b46e；

The regulations cited in the announcement are: Minor Sanctions Risk, Sections 510.201 and 510.210 of the North Korea Sanctions Regulations, Prohibited Transactions by Persons Owned or Controlled by U.S. Financial Institutions.

The following is a translation of the original U.S. Treasury Department press release:

On August 23, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on one of the three co-founders of the virtual currency mixer Tornado Cash, Roman Semenov (Roman Semenov), on the grounds that he contributed to Tornado Cash and the Lazarus Group, a state-backed hacking group backed by North Korea, provided material support. Since its creation in 2019, Tornado Cash has been used to launder money for criminals, including virtual currency used to cover hundreds of millions of dollars stolen by Lazarus Group hackers.

The sanction decision was made in conjunction with the U.S. Department of Justice (DOJ), which today filed charges against Semenov and Tornado Cash’s second co-founder, Roman Storm, who today Arrested by the FBI and IRS Criminal Investigations Division. The DOJ charged Semenov and Storm with conspiracy to commit money laundering, conspiracy to operate an unlicensed money transmission business, and conspiracy to violate sanctions. The third co-founder of Tornado Cash, Alexey Pertsev, was arrested by Dutch law enforcement authorities in the Netherlands in August 2022 on charges related to money laundering.

Lazarus Group, sanctioned by the United States in 2019, used Tornado Cash to cover the flow of more than $455 million in stolen funds during an attack on Axie Infinity’s Ronin cross-chain bridge in March 2022, the largest known to date virtual currency theft. The Lazarus Group then used Tornado Cash to launder over $96 million in funds stolen from the June 24, 2022, cyberattack on Harmony's Horizon bridge, and at least $7.8 million in the August 2, 2022 Nomad theft USD funding. That revenue provides North Korea with the resources to support its illicit ballistic missile and nuclear weapons programs.

“Even after knowing that Lazarus Group laundered hundreds of millions of dollars worth of stolen virtual currency for North Korea through their currency mixing service, Tornado Cash’s The founders continued to develop and promote the service without taking substantial steps to reduce its use for illicit purposes." "Today's actions by IRS criminal investigators and OFAC demonstrate Treasury's commitment to continuing to pursue those who operate recklessly and Those who support dangerous virtual currency mixing services that threaten our national security."

Today's charges and indictment build on earlier actions that reveal elements of the virtual currency ecosystem, including the Lazarus Group, used to conceal the origin and destination of proceeds from its illicit activities. It also underscores Treasury's commitment to protecting the integrity of our financial system, including the virtual currency ecosystem, and undermining the North Korean regime's ability to raise funds through illicit activities.

In 2022, OFAC sanctioned Tornado Cash and Blender.io, both of which provided mixing services to Lazarus Group. This year, OFAC sanctioned two over-the-counter virtual currency traders who facilitated the conversion of stolen virtual currency into fiat currency for North Korean actors working with the Lazarus Group. Tomorrow, the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) will host a FinCEN Exchange focused on countering North Korea’s abuse of the digital ecosystem, which will include representatives from Treasury, law enforcement, and the financial sector. Treasury will continue to use all of its tools to address North Korea's cyber-illicit financial threats.

ROMAN SEMENOV: KEY DEVELOPER OF TORNADO CASH

Roman Semenov, a Russian citizen, co-founded Tornado Cash as a currency mixing service to increase the anonymity of user transactions. Semenov is actively involved in promoting Tornado Cash in the media and online platforms, and advises Tornado Cash users to make transactions anonymous. After being alerted that Tornado Cash was being used to launder large amounts of stolen virtual currency for the Lazarus Group, he and his partners continued to pay for the infrastructure supporting the Tornado Cash service and took steps to increase the anonymity of the Tornado Cash service without Take appropriate steps to address known illicit use by North Korea.

In April 2022, Semenov learned of an Ethereum address publicly attributed to the Lazarus Group and identified on the Specially Designated Nationals and Blocked Persons List (SDN List) containing $620 million worth of stolen Ronin funds , is sending funds through Tornado Cash's service. Semenov and his partners built a front-end sanctions screening service, but they did so knowing that it was easy to evade and did not take steps to adequately address North Korea's active abuses. Despite information from publicly available blockchain analysis and media inquiries, Semenov consistently ignored or downplayed evidence that Tornado Cash was being used to launder virtual currency for North Korea and continued to be involved in the operation and maintenance of the Tornado Cash service, and No meaningful action was taken to prevent or mitigate the risk of using Tornado Cash to launder the proceeds of illicit activity following the subsequent high-profile theft.

The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) imposed sanctions on the Lazarus Group pursuant to Executive Order (EO) 13722 on September 13, 2019, and designated it as an agency, instrumentality, or controlled entity of the North Korean government. The Lazarus Group has been in operation for more than 10 years, stealing more than $2 billion worth of digital assets in multiple thefts. Pressured by strong U.S. and U.N. sanctions, North Korea has had to resort to illegal means, such as cyber-grabbing by the Lazarus Group, to raise funds for its illicit WMD and ballistic missile programs.

Semenov was designated for sanctions pursuant to EO 13694, as amended by EO 13757, because he substantially assisted, sponsored, or contributed to subparagraph (a)(ii) or (a)(iii)(A) of EO 13694, as amended. ), or any person whose property and interests in property are frozen under EO 13694, as amended, provides financial, material, or technical assistance, or provides goods or services; and under EO 13722, he substantially assists, sponsors, or contributes to Financial, material or technical support, or provision of goods or services by the North Korean government, persons whose property and interests in property are frozen under EO 13722.

Sanctions Impact

As a result of today's action, all property and property interests of designated individuals in the United States or in the possession or control of U.S. persons must be frozen and reported to OFAC. OFAC's regulations generally prohibit all transactions involving any property or interest in property of a person who is a U.S. person or within the United States (including transactions through the United States) that is blocked or designated.

In addition, persons who engage in certain transactions with individuals designated today may also be themselves exposed to the risks designated.

The strength and integrity of the sanctions come not only from OFAC's ability to designate and add persons to the Specially Designated Nationals and Blocked Persons List (SDN List), but also from OFAC's willingness to remove persons from the SDN List in accordance with the law. The ultimate goal of sanctions is not to punish, but to induce positive changes in behaviour. For information on the process for seeking removal from OFAC's lists, including the SDN List, please refer to OFAC's FAQ 897. See OFAC's website for the detailed process for submitting a request to be removed from OFAC's Sanctions List.