Ethereum News Today: Ethereum Mixer Tornado Cash Co-Founder Convicted in $1B Laundering Scheme

Roman Storm, co-founder of the Ethereum-based crypto mixing service Tornado Cash, has been found guilty of conspiring to operate an unlicensed money-transmitting business in a U.S. federal court. The Department of Justice (DOJ) alleges that Storm knowingly helped run a platform used to launder over $1 billion in stolen cryptocurrency, including funds from cyberattacks linked to North Korea’s Lazarus Group [1].

Tornado Cash was designed to obscure the origins of digital currency transactions, enabling users to break the trail of funds. The DOJ says Storm and his co-developers did not merely create the software but actively promoted and maintained the service, generating over $12 million in revenue before the platform was sanctioned. The mixer played a key role in laundering proceeds from the Ronin network hack, a breach that saw over $600 million stolen, with the FBI tracing the attack to the North Korean hacking group [2].

Prosecutors argue that Storm continued to support the service even after the U.S. government imposed sanctions on Tornado Cash in August 2022. He is accused of ignoring clear warnings that the platform was being used for illicit financial activity. The DOJ emphasized that the defendants were not passive observers but active participants in a criminal enterprise that helped shield stolen funds from detection [3].

The conviction marks a significant escalation in U.S. enforcement efforts targeting cryptocurrency tools used for money laundering and illicit finance. The case was tried over four weeks, with a jury delivering a guilty verdict on the central charge of conspiracy. The offense carries a maximum penalty of five years in federal prison. U.S. Attorney Jay Clayton stated that the conviction sends a clear message: developers must be held accountable for the real-world use of their technology [4].

The case is expected to set a legal precedent in the rapidly evolving crypto space. Regulators and law enforcement agencies have increasingly focused on the misuse of decentralized tools, and this conviction demonstrates their willingness to pursue individual contributors. The DOJ credited the FBI and IRS for their investigative work in tracing the flow of funds and building the case [5].

The ruling underscores the growing regulatory scrutiny of the crypto ecosystem and signals that anonymity-focused tools will face heightened legal risks. As enforcement agencies become more sophisticated in tracking digital transactions, the line between legitimate innovation and criminal activity is being redrawn with greater clarity.

Source:

[1] Tornado Cash Co-Founder Goes Down for $1B Crypto Crime Ring

[2] Tornado Cash Co-Founder Goes Down for $1B Crypto Crime Ring

[3] Tornado Cash Co-Founder Goes Down for $1B Crypto Crime Ring

[4] Tornado Cash Co-Founder Goes Down for $1B Crypto Crime Ring

[5] Tornado Cash Co-Founder Goes Down for $1B Crypto Crime Ring