The United States Department of Justice (DOJ) has filed a motion to dismiss the charges against Roman Semenov, who is listed as a co-founder of Tornado Cash. The DOJ argues that Semenov failed to update the protocol to exclude sanctioned addresses. The defense’s presentation of facts at an early stage is seen as a strategic move.
The DOJ’s response outlines the allegations against Semenov, analyzing his accountability for the alleged offenses. The DOJ claims that Tornado Cash, which was developed by Semenov and his fellow developer, Storm, is a mixer app used for hiding crypto transactions. The service includes a dedicated website, a user interface, smart contracts, and “relayers” for transmission.
Semenov and Storm are accused of plotting money laundering, operating without a money transmitting license, and violating sanctions by creating Tornado Cash. The US government also alleges that Lazarus North Korea used Tornado Cash for money laundering. Storm pleaded not guilty to all charges in September 2023 and was released on a $2 million bond.
One of the restrictions imposed on Storm is that he cannot travel without a warrant in certain areas of New York, New Jersey, Washington, and California. However, Storm’s lawyers filed a Motion to Dismiss in March, arguing that the authorities lacked sufficient grounds to charge him with a crime. Semenov clarified that he was only responsible for the code design, not how the app functioned.
Semenov’s defense portrays Tornado Cash as a non-profit mixing service that does not meet the criteria of a traditional financial institution. They argue that Storm was not in control of the service and did not know if it was being used by the Lazarus Group or other criminals. The prosecution, however, holds Storm accountable for operating the cryptocurrency, highlighting the government’s concern about the threat of crypto mixers.
In a separate case, 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 charge is 20 years, while the maximum sentence for conspiracy to operate an unlicensed money-transmitting business is 5 years. The arrest has sparked a discussion about the connection between mixing services and criminal activity, with some arguing that they are not primarily linked to crime.