U.S. government officials on Wednesday started cracking down on co-founders of the virtual currency mixer Tornado Cash, just days after a federal judge decided that the government had the authority to sanction them.
Tornado Cash was sanctioned in August 2022, accused of helping to launder more than $7 billion worth of virtual currency since its creation in 2019. Treasury says Tornado Cash’s systems were used, among other things, to launder more than $96 million drawn from the June Harmony blockchain bridge theft and August Nomad crypto firm heist. Federal prosecutors also charged Semenov and Storm with violating the sanctions against Tornado Cash.
The penalties and arrest come after U.S. District Judge Robert Pitman decided Aug. 17 that Treasury did not overstep its authority in sanctioning Tornado Cash. A group of crypto investors brought a lawsuit against Treasury in September 2022, alleging that Treasury overstepped its authority in sanctioning Tornado Cash., which argued that the sanctions open the door to limiting Americans’ usage of privacy software.
Blender is accused of helping Lazarus Group to carry out a $620 million digital currency heist in March, the biggest of its kind to date.
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