DOJ Counters Motion to Dismiss Charges Against Tornado Cash Developer
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The United States Department of Justice (DOJ) has taken a significant step by opposing a motion to dismiss criminal charges against Roman Semenov, the creator of the cryptocurrency mixing service Tornado Cash. The DOJ stated in a recent court statement that they have a strong case with substantial evidence against Roman Semenov in the Tornado Cash Laundering case.
Roman Semenov and Roman Storm are accused of running Tornado Cash, a platform that enabled cybercriminals to launder more than $1 billion, including funds linked to North Korea’s armament programs. The DOJ’s submission to the Southern District of New York opposes the dismissal of charges against Roman Semenov.
Tornado Cash is accused of participating in massive laundering activities from September 2020 to August 2022, using blockchain anonymity technology to conceal the origins of unlawful payments. Semenov, who posed as a legitimate cryptocurrency-mixing enterprise, faces charges for engaging in illicit activities via the Tornado Cash platform.
The prosecutors claim that Tornado Cash allowed users to obscure the origins of their ether by combining potentially identifiable or “tainted” payments with others, making transactions almost untraceable.
According to the complaint, the defendant cannot obtain dismissal of the indictment by simply making factual assertions about his own contested view of how the Tornado Cash service operated. The prosecutors argue that Tornado Cash was an active participant in illegal operations, rather than just a neutral technological service. They also claim that Semenov, Storm, and their colleagues were fully aware of the criminal nature of the processed payments and highlight the absence of standard financial service provider compliance controls, such as Know Your Customer (KYC) standards. The government also claims to have sufficient evidence to back up its assertions, which it will present later in court.
Prosecutors assert that the presence of cryptocurrency in the defendant’s residence could serve as direct evidence of the offenses involved. The government anticipates that the evidence at trial will prove that the vast majority of Tornado Cash transactions occurred through the UI during the relevant period. During the Daubert hearings, defence specialists and third-party critics questioned the government’s ostensibly strong evidence. OXT Research published an archived investigation in their blog post “Pseudoscience” on March 13, 2024, challenging the DOJ’s forensic methodologies and alleging they fall short of rigorous scientific standards and peer review, potentially resulting in incorrect conclusions.
The DOJ shut down the blockchain explorer tool OXT after its owner, Samourai Wallet, faced accusations of money laundering and operating a BTC mixing service without a money transmitter license. The ongoing court procedures of the Tornado Cash and Samourai Wallet founders’ lawsuits are closely monitored by the cryptocurrency community and observers for potential implications on regulatory and legal standards in blockchain analytics.
The outcomes of both court proceedings will most likely affect future cryptocurrency-related lawsuits, as well as evidentiary standards in United States courts. The notes filed with the court state that the government expects to introduce evidence at trial regarding how the UI generated the secret notes, including an instructional video for using Tornado Cash that the defendant endorsed.
