Latest news with #RomanStorm
Yahoo
3 days ago
- Yahoo
Tornado Cash money launderer tells jury how he pulled off a $1M NFT scam at age 20
Tornado Cash founder Roman Storm is fighting money-laundering charges in federal court in Manhattan. On Wednesday, a convicted NFT scammer testified he used Tornado Cash to launder $1M at age 20. He called it Tornado Shark by mistake and exchanged "washy washy" jokes and soap emojis with a pal. A federal jury glimpsed the haphazard, emoji-bedecked world of a 20-year-old NFT scammer on Wednesday during testimony at the Tornado Cash money-laundering trial in Manhattan. Convicted fraudster Andre Marcus Quiddaoen Llacuna, now 23, spent the afternoon testifying against Tornado Cash cofounder Roman Storm, who prosecutors say got rich running a "giant washing machine" that laundered more than a billion dollars in dirty crypto. Llacuna told the jury he found out about Tornado Cash on Reddit, and that his girlfriend made fun of him because he kept calling it "Tornado Shark" by mistake. "It was the best option to hide the money — and get away with it," Llacuna said of the so-called cryptocurrency "mixing" tool. Tornado Cash lets users deposit and then withdraw crypto from a shared pool, obscuring their identities on both ends. "Washy washy," Llacuna said he joked to his girlfriend in January 2022, after she sent him a soap emoji in response to his news — he had just transferred $1 million in "ETH," or Ethereum blockchain-based crypto, into the Tornado Cash app. "And when you said 'washy washy,' what were you referring to?" Nathan Rehn, an assistant US attorney, asked. "I was referring to us cleaning the money," the young scammer answered. When Rehn asked, "How did you clean the money?" Llacuna answered, "By using Tornado Cash." The prosecutor quickly told US District Judge Katherine Polk Failla, "Nothing further, your honor." Llacuna, of Arcadia, California, testified against Storm under a government cooperation agreement, in hopes, he said, of leniency when he is sentenced in his own Manhattan money-laundering case. He testified that the crypto he dumped into Tornado Cash — and then anonymously withdrew days later — was the proceeds from selling 8,888 worthless NFTs called "Frosties.". Llacuna and a codefendant, who has also pleaded guilty, promised investors these "Frosties" — which sold for .04 ETH or around $200 to $300 — would be featured in a game they were developing. Investors were also told they could "breed" their Frosties if they liked. "If you purchased two or more Frosties, you could manufacture a miniature Frostie and get that for free," he said investors were told. But as soon as the offering of 8,888 Frosties NFTs sold out, Llacuna and his friend — who was also 20 — executed what's called a "rug pull." They took down the Frosties webpage and its Twitter and Discord accounts and vanished, rendering Frosties essentially valueless, he testified. "Obviously, there was a negative reaction," he told the jury. Llacuna, who told the jury he became interested in crypto in Middle School and is now working as a hairstylist, is the fifth government witness to testify against Storm. The Russian expat faces more than 40 years in prison if convicted of conspiring to launder money, to run an unlicensed money-transfer company, and to violate federal sanctions. Prosecutors say Storm made millions by knowingly helping crypto scammers and hackers hide their criminal proceeds. His customers, they say, included North Korea-backed hackers who used Tornado Cash to launder hundreds of millions of stolen crypto, including from the notorious $600 million "Ronin" heist in 2021. Storm and his lawyers counter that all he did was write a successful software program that helps users achieve financial privacy. If hackers and scammers use the program to launder money, "there's nothing Roman can do" to stop them or return the money to victims, defense attorney Keri Curtis Axel told the jury in opening statements on Monday. In the trial's first three days of testimony, the jury has also heard from a Chinese-language court interpreter from Georgia who lost her $250,000 life savings to a crypto scammer she met online. She testified Wednesday that a private investigator tracked $150,000 of the money to Tornado Cash. But when she sent an email to customer service at Hello@ she received no response. That witness, Hanfeng Lin, was one of two hacking victims who told jurors they watched their money disappear into Tornado Cash — and got very little satisfaction when they reached out to complain. Attorney Joseph B. Evans said he represented BitMart, a crypto exchange that lost $196 million to hackers in December 2021. Evans testified he sent a letter addressed "Dear Tornado Cash" to Storm directly, laying out details of an internal investigation that tracked the hacked funds there. He asked Storm to freeze the assets and preserve the transaction data. Instead of help, he got a dismissive letter and zero help, he told the jury. The letter said Tornado Cash was a program that "no entity can control." "Our company does not have any ability to effect any change or take any action," Evans said the reply read. "It is a decentralized software program that no entity can control," it read, according to Evans. "For that reason, we are unable to assist with respect to any issues with respect to the Tornado Cash protocol." The trial is expected to last about a month. Read the original article on Business Insider Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
4 days ago
- Business
- Yahoo
Tornado Cash was a 'giant washing machine' for North Korea's dirty crypto, feds tell Roman Storm jury
Tornado Cash developer Roman Storm is on trial for a $1B crypto-laundering conspiracy. Prosecutors say Tornado Cash was the go-to anonymizing tool for hackers and scammers. Storm brazenly wore a shirt featuring the Tornado Cash logo and a washing machine, prosecutors said. Is Tornado Cash developer Roman Storm just a smart and selfless software engineer? Or is the 34-year-old Russian expat the go-to money launderer for the world's biggest scammers and hackers? A federal jury in Manhattan heard two very different stories in opening statements Tuesday for Storm's $1 billion money laundering conspiracy trial. Prosecutors pointed to three of the biggest crypto heists in recent years — including North Korea's $600 million hack attack on the online gaming platform Axie Infinity. Each time, the criminals hid their stolen money by running it through Tornado Cash, prosecutor Special US Attorney Kevin Gerard Mosley told the seven-woman, five-man jury. Storm's popular online tool "mixes" cryptocurrency, scrambling transactions to make them "basically untraceable and virtually impossible for law enforcement or anyone else to track," Mosley told the jury. "The defendant was running and profiting from a giant washing machine for dirty money, and he knew it," the prosecutor said. "He even marketed Tornado Cash as a washing machine," he added. "In fact," he promised jurors, "you will see a photo of the defendant wearing a T-shirt showing a washing machine with the Tornado Cash logo on it." Prosecutors say Storm kept laundering hundreds of millions of dollars for hackers with the North Korea-linked Lazarus Group even after such transactions were banned under US and global sanctions. "Criminals could avoid being tracked by running their money through the defendant's washing machine," Mosley said of Tornado Cash, a so-called crypto "mixing" tool that lets users deposit and withdraw crypto from a shared pool, obscuring the identities on either end of the transaction. "It would be mixed up with other crypto," Mosley said of the hackers' criminal proceeds, "so it would come out looking clean." Storm tried to cover his tracks after the Lazarus Group was sanctioned, the prosecutor said, by removing a single software control "switch" that could be used to shut off just one part of the washing machine. "He did that so he could pretend the whole washing machine was out of his control," while continuing to reap millions in profits, the prosecutor said. But in fact, Storm was still "running the whole laundromat," he added. "He had the keys to the front door, he paid the gas and electric bills, he still said, 'We're open for business.'" In her own opening statement, defense attorney Keri Curtis Axel countered that Storm is just a privacy advocate who wrote some very useful code. Tornado Cash was backed by US investors, and was built for perfectly legitimate purposes, she told the jury. "Roman had nothing to do with the hackers and scammers — he didn't want them to use Tornado Cash," she said. "The overwhelming majority of people who used it were normal people using it for their own financial privacy, which is the purpose that Roman intended." As for that T-shirt? The one with the Tornado Cash logo imposed over a washing machine? "He wore it at a reputable tech conference in Boston in 2019," Axel said. "And people of the jury, I want you to keep in mind it's just a T-shirt — worn in poor taste." "It's like a comic strip or a meme. It was a joke," she said. "It was not evidence of a crime." The trial is expected to last about a month and to feature both hackers and victims among the government's witnesses. Storm faces up to 40 years in prison if convicted of conspiring to commit money laundering, run an unlicensed money-transmitting company, and violate federal sanctions. Read the original article on Business Insider
Bloomberg
4 days ago
- Business
- Bloomberg
Crypto Mixer Co-Founder on Trial as Trump Embraces Digital Assets
While President Donald Trump's administration has dropped or rolled-back several high-profile actions against the US digital asset industry, the ongoing case involving crypto mixer Tornado Cash is a significant exception. Roman Storm, co-founder of a software platform that facilitates anonymous crypto transactions, is facing a trial on charges that he helped launder more than $1 billion, with opening arguments scheduled to start Tuesday in New York. That sum includes hundreds of millions allegedly stolen by the Lazarus Group, which the US says is a cybercrime organization that works for the North Korean government.
Yahoo
6 days ago
- Business
- Yahoo
Cryptoprivacy on trial: jury to decide if Tornado Cash's Roman Storm is a $1B money launderer or a free speech hero
Roman Storm, creator of the crypto-anonymizing tool Tornado Cash, goes on trial in NYC on Monday. The DOJ says he helped launder more than $1B in criminal proceeds, including for North Korea. Storm says software code is protected speech, and he's not responsible for how Tornado Cash is used. A federal jury in Manhattan is about to get an education in cryptocurrency mixing, the future of "DeFi," and how North Korean dictator Kim Jong Un pays for his nukes. Jury selection begins Monday, and cyberprivacy advocates say the verdict will shape the very future of decentralized finance, or DeFi. That's the blockchain-based system where users can lend, borrow, and earn interest on cryptocurrencies person to person, bypassing banks, exchanges, or the stock market. According to an online resource for currency traders, the DeFi market has a market value of about $121 billion. Opening statements may begin as early as Tuesday. "If I lose my case, DeFi dies with me," the trial's lone defendant, Seattle-based software developer Roman Storm, rather dramatically pronounced in a podcast a week ago. Storm is one of the creators of Tornado Cash, a software tool that digitally "mixes" cryptocurrency, scrambling transactions to make them even more anonymous. It lets users deposit and withdraw crypto from a shared pool, obscuring their identities. Federal prosecutors say that between 2019 and 2022, the 35-year-old Russian expat knowingly let hackers and fraudsters use Tornado Cash to scramble and launder more than $1 billion — and made millions himself in the process. "The Tornado Cash service was used to launder large volumes of criminal proceeds with the knowledge and participation of the defendant," Assistant US Attorney Thane Rehn told the judge in 2023, when Storm pleaded not guilty at his first Manhattan court appearance. Prosecutors are particularly concerned over the hundreds of millions of dollars in crypto they say Storm laundered for the Lazarus Group, the notorious North Korea-sponsored cybercrime organization credited with the 2014 Sony Pictures hack, an $81 million Bangladeshi bank heist in 2016, and the 2017 WannaCry ransomware attacks. Federal and UN officials say Kim uses the Lazarus Group to fund his nuclear missile program. In 2022, the Biden Treasury Department barred US citizens from using Tornado Cash, saying that Lazarus Group and other cybercrooks used it to launder more than $7 billion in criminal proceeds. The Trump Treasury Department lifted these sanctions without explanation in March. Storm is now a cause célèbre among DeFi and blockchain privacy advocates. Amicus briefs on his behalf have been filed by the Blockchain Association, Coin Center, the DeFi Education Fund, Paradigm, and the Electronic Frontier Foundation. He has received significant financial support as well. According to more than $2.5 million in the Ethereum network-backed cryptocurrency Ether has been donated for Storm's and fellow Tornado Cash developer Alexey Pertsev's legal defense, thanks to fundraising by the Ethereum Foundation, Paradigm, and others. Pertsev was convicted of money laundering in a Dutch court last year. A third Tornado Cash cofounder, Roman Semenov, was charged with Storm but remains a fugitive. The defense contends in court filings that Storm never had control over or custody of the money that passed through his cryptocurrency mixing tool and never knowingly helped cybercriminals. "I did not have any contact whatsoever with any criminals, any criminal organizations, any illicit actors, any North Koreans," Storm said on the podcast Crypto in America. Prosecutors say communications show otherwise, including one in which Storm told his cofounders, "Guys, we're fucked" as the bits, so to speak, hit the fan. Privacy advocates and Storm himself complain that his prosecution persists despite a DOJ memo in April announcing the office "will no longer target virtual currency exchanges, mixing and tumbling services, and offline wallets for the acts of their end uses." "The Department of Justice is not a digital assets regulator," said the memo. Signed by Trump lawyer-turned-Deputy US Attorney General Todd Blanche, it criticized the Biden administration for "pursuing a reckless strategy of regulation by prosecution." Attorneys for Storm did not respond to requests for comment on Friday. A spokesperson for the US Attorney's Office in Manhattan declined to comment on the ongoing case. Tornado Cash, meanwhile, keeps spinning along. Storm told the Crypto in America podcast last week that all he did was write code. "I did not feel I'm responsible for managing how somebody's using the software," he said. And once the code for Tornado Cash was let loose into the DeFi world, it basically ran automatically, he told the podcast. He couldn't flip the off switch if he tried, he said, because no such switch exists. "Correct," Storm answered when the podcasters asked if Tornado Cash is still up and running. "It's always been running. Just like the Ethereum network, or the bitcoin network, or the internet," he said. "It's immutable and decentralized," he said. "It's unstoppable." Storm remains free on $2 million bail and faces up to 40 years in prison if convicted. "I don't have a 100% answer right now," he said when the podcasters asked if he intends to take the stand. "I may, or may not." The trial is expected to last at least three weeks. Read the original article on Business Insider
WIRED
11-07-2025
- Business
- WIRED
Tornado Cash Made Crypto Anonymous. Now One of Its Creators Faces Trial
Jul 11, 2025 6:00 AM Roman Storm, one of the developers of crypto-anonymizing tool Tornado Cash, will stand trial in New York starting July 14. His supporters claim the freedom to develop software is under threat. Photograph:A month ago, Roman Storm took to X with a message—half lament and half warning—to his supporters in the cryptocurrency scene: 'In 31 days, I face trial,' he wrote. 'I'm fighting, but the weight is unbearable. This isn't just my end; it's ours.' Storm is one of the creators of Tornado Cash, a software tool for anonymizing crypto holdings. On July 14, the Kazakh-born developer will stand trial in the Southern District of New York, charged with conspiracy to commit money laundering and sanctions violations, and conspiracy to operate an unlicensed money transmitting business. If found guilty, he faces up to 45 years in prison. Since the US Department of Justice charged Storm in 2023, his case has become a cause célèbre among crypto advocates. The DOJ alleges that Storm built and profited from a tool that allowed illicit actors—among them hackers with ties to North Korea—to launder at least $1 billion in crypto. But his supporters argue that all Storm did was publish code, an act of protected free speech. 'It's about the freedom to write code,' says Vitalik Buterin, cocreator of Ethereum, the blockchain network on which Tornado Cash runs. 'If the code-as-free-speech precedent is lost, that creates legal risk to people working on a pretty unbounded category of applications, and would create a pretty significant chilling effect.' At trial, though, prosecutors will attempt to convince a jury that the case is far less fraught than all that. 'The government has not charged the defendant with a crime that involves solely writing code,' the DOJ claimed in an earlier court filing. 'The defendant in the case did much more,' the filing later says about that argument. Storm and the DOJ both declined to be interviewed for this story. Tornado Cash was created in 2019 by Storm and two other developers, Alexey Pertsev and Roman Semenov. The aim was to create a way to mask the ownership of crypto coins by interrupting the public trail of transactions recorded on a blockchain: Once deposited into Tornado Cash, coins belonging to many different parties are pooled, jumbled, and spat into brand new wallets, by which time it is no longer clear whose crypto is whose. In May 2020, the founders made a change to the code that prevented anybody—themselves included—from modifying or disabling the underlying software, meaning Tornado Cash could operate independent of their involvement, court filings explain. But they maintained control over the website and interface through which the majority of Tornado Cash traffic passed. They also established a means of profiting by a corresponding crypto token, TORN, the value of which is roughly correlated to the amount of activity on Tornado Cash, prosecutors allege. Services like Tornado Cash, sometimes described as mixers, are promoted by their advocates as a way to improve the level of privacy available to crypto users. 'We've basically sleepwalked into a world where every transaction is tracked by default,' says Buterin. 'We see privacy as something that should apply to money.' But crypto mixers have been readily co-opted for the purpose of money laundering, which has drawn the ire of governments. On August 8, 2022, the Biden administration banned US citizens from using Tornado Cash. The service represented a "significant threat to [US] national security,' wrote the Treasury Department's Office of Foreign Assets Control, when it announced the sanctions. Tornado Cash had been used to launder billions of dollars worth of crypto, OFAC alleged, including $455 million stolen by the Lazarus Group, a cybercriminal operation sponsored by the state of North Korea. Two days later, Pertsev was arrested by Dutch authorities. In a sort of preview of the arguments that will now play out in US court, Pertsev was tried in the Netherlands on money laundering charges. He was ultimately found guilty and sentenced to five years and four months in prison. (Pertsev is appealing the verdict.) In August 2023, the DOJ brought charges against both Storm, who was arrested at his home near Seattle, and Semenov, who is currently wanted by the FBI. 'Claiming to offer the Tornado Cash service as a 'privacy service,' the defendants in fact knew that it was a haven for criminals to engage in large-scale money laundering and sanctions evasion,' the indictment alleged. Under President Donald Trump, the US has performed an about-face in its attitude towards crypto enforcement, raising hopes among Storm's supporters that the charges against him might be dropped. Since Trump returned to the White House in January, his administration has pardoned crypto executives who had pleaded guilty to white collar offenses. In March, OFAC scrapped the sanctions imposed on Tornado Cash after a successful legal challenge by members of the crypto industry who argued the agency had overstepped its authority. The following month, deputy attorney general Todd Blanche announced that the DOJ would deprioritize certain crypto prosecutions, including failures to prevent money laundering and obtain money transmission licenses. Nevertheless, the government will continue to pursue the criminal prosecution of Storm. 'This really is a vestige of the Biden administration's war on crypto,' claims Jake Chervinsky, chief legal officer at crypto VC firm Variant, who coauthored a court brief in support of Storm. 'It's shocking the case is still moving forward.' The DOJ's decision to press onward might be interpreted as a signal of its confidence in its evidence—the full scope of which will only become clear at trial—and extent of the wrongdoing, says Joel Cohen, who leads the white collar practice at law firm White & Case. 'When prosecutors get down to the issue of proving a case, they're not thinking about how the case aligns with the department's philosophy,' says Cohen. 'When you get into battle, you fight like heck. That's what you do.' The legal wranglings in the leadup to trial suggest that the prosecution and defense largely agree over the facts at hand: who developed Tornado Cash, its basic functions, and how it was abused by illicit actors. The trial will pivot on 'a fundamental disagreement about whether those facts add up to a criminal offense,' says Chervinsky. A large portion of the trial, legal experts say, will focus on whether Storm intended for Tornado Cash to be used for illicit means, whether he knew that it was used to launder stolen funds, and whether he knew that inaction meant breaking the law, as prosecutors allege. The defense will claim that the developers never intended that Tornado Cash be used to commit fraud, says Cohen. 'The prosecution will say that they should have known but stuck their heads in the sand,' he says. The jury will also be presented with conflicting views as to how Tornado Cash was structured and operated, which could have a bearing on what rules Storm and the other developers were required to follow. Government prosecutors contend that Tornado Cash was effectively run like any other for-profit business, irrespective of the founders relinquishing control of the underlying code. In the indictment, they argue that Storm was operating a money transmitter, which required him to collect identifying information about users that might have prevented Tornado Cash being abused to launder the proceeds of cybercrime. The defense, meanwhile, has repeatedly emphasized the distance between Storm and the transactions that pass through Tornado Cash. Though the developers administered an optional user interface, at no point did they have custody of users' funds, they point out. Storm's supporters claim that the government's interpretation of money transmission law is without precedent. 'If publishing a software protocol for private transactions that people make on their own behalf is a crime in this country, then we've abandoned all of our First and Fourth Amendment principles that make this country great,' claims Peter Van Valkenburgh, executive director at crypto advocacy nonprofit Coin Center. A guilty verdict, Storm has implied, could deal a potentially fatal blow to decentralized finance—the ambition in crypto circles to develop peer-to-peer financial services free from rent-seeking intermediaries and top-down control. 'If I lose, DeFi dies with me,' he wrote, in the June X post. 'The dream of financial freedom, the code I believed in—it all fades into darkness.' The spillover effects could be even greater in scope, others have argued, resulting in a chilling of the entire software development industry. 'It's a referendum on the right to publish software. It's much broader than DeFi,' claims Van Valkenburgh. 'It's a referendum on whether you can perform the functions of a software developer and communications intermediary without facing unlimited criminal liability for sanctions, money laundering, and unlicensed money transmission.' If Storm is liable for the abuse of Tornado Cash by illicit actors, his defenders ask, why isn't Linus Torvalds liable for criminality enabled by the Linux operating system, or Meta liable for criminal activity conducted over WhatsApp? In the event of a guilty verdict, there is a high likelihood that these arguments will escalate to the appellate courts. Multiple Storm supporters say they prefer his chances in the Second Circuit, where judges—instead of a jury of peers—are tasked with rendering a cold and unemotional verdict on the application of the law. 'The government's theory cannot be correct and ultimately will be rejected by the courts, if not by a jury,' claims Chervinsky. 'The Supreme Court of the United States may be where we end up.' For his part, Storm has cut a resolute and unrepentant figure as his trial date approaches. 'I do not have any regrets of my actions,' he said in a recent interview with the Crypto In America podcast. 'I wouldn't change anything I've done.'
