The Southern District of New York has revealed an indictment against Tornado Cash founders Roman Storm and Roman Semenov.

The focus of the charges revolves around Tornado Cash's alleged involvement in laundering more than $1 billion:

"The Indictment's charges relate to the defendants' purported establishment, operation, and promotion of Tornado Cash. This cryptocurrency mixer allegedly facilitated over $1 billion in money laundering transactions and washed hundreds of millions of dollars for the Lazarus Group, a sanctioned cybercrime organization from North Korea."

Adding complexity to the situation is its connection with the Lazarus Group, a North Korean cybercrime entity that the US had previously sanctioned.

Coinlive reported on how the FBI issued a warning on August 22, flagging a $40 million BTC sell-off linked to the group.

Despite its claim to enhance privacy for cryptocurrency transactions, the current legal charges against Tornado Cash's developers have led to intense scrutiny of its operations.

Regulators suggest that the platform's role as a cryptocurrency mixer played a key part in what could be one of the most significant money laundering operations within the digital currency realm:

"Today's indictment serves as a reminder that using cryptocurrency transactions for money laundering breaches the law. Those involved in such activities will be prosecuted."

What is Tornado Cash?

Tornado Cash is a privacy-focused decentralised Ethereum mixing service that mixes "tainted" cryptocurrencies with others so as to obscure the blockchain trail.

Despite its association with money laundering, privacy mixing services can also be used to donate to causes without revealing the donater's identity, as shown by Vitalik Buterin.