The United States Treasury’s Office of Foreign Assets Control (OFAC) added Roman Semenov, one of the co-founders of the Tornado Cash cryptocurrency “mixer,” to its list of Specially Designated Nationals and Blocked Persons (SDN) on Aug. 23. Another co-founder, Roman Storm, was arrested by the Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigation division in Washington state the same day.
Semenov and Storm are being charged with conspiracy to commit money laundering, conspiracy to commit sanctions violations and conspiracy to operate an unlicensed money transmitting business in an indictment unsealed on Aug. 23. The first two counts each carry a maximum sentence of 20 years in prison. The money transmitting charge is punishable by up to five years’ imprisonment.
Semenov remains at large. The third Tornado Cash co-founder, Alexey Pertsev, was arrested in the Netherlands on money laundering charges in August 2022.
U.S. Attorney for the Southern District of New York Damian Williams said in a statement released by the Justice Department (DOJ):
“As alleged […] While publicly claiming to offer a technically sophisticated privacy service, Storm and Semenov in fact knew that they were helping hackers and fraudsters conceal the fruits of their crimes.”
The law enforcement actions are a continuation of a U.S. government crackdown on Tornado Cash that began last year. In August 2022, OFAC placed 44 USD Coin (USDC) and Ether (ETH) addresses on the SDN list, effectively preventing U.S. residents from using the service.
OFAC’s sanctioning of Tornado Cash caused a backlash in the crypto community. Coinbase backed a suit filed by six individuals that alleged the Treasury Department exceeded its authority in sanctioning the mixer. Advocacy group Coin Center filed a similar suit. Pro-crypto member of the U.S. House of Representatives Tom Emmer also wrote a letter to Treasury Secretary Janet Yellen questioning the move.
Both the DOJ and OFAC specifically refer to Tornado Cash’s role in laundering funds of the North Korean-linked hackers Lazarus Group, which is also on the SDN list, but Tornado Cash has been implicated in several other hacks as well. All told, the mixer has laundered over $1 billion in ill-gotten gains, according to DOJ allegations.
Canterbury MP Rosie Duffield has resigned from the Labour Party.
The 53-year-old MP is the first to jump ship since the general election and in her resignation letter criticised the prime minister for accepting thousands of pounds worth of gifts.
She told Sir Keir Starmer the reason for leaving now is “the programme of policies you seem determined to stick to”, despite their unpopularity with the electorate and MPs.
In her letter she accused the prime minister and his top team of “sleaze, nepotism and apparent avarice” which are “off the scale”.
“I’m so ashamed of what you and your inner circle have done to tarnish and humiliate our once proud party,” she said.
Since December 2019, the prime minister received £107,145 in gifts, benefits, and hospitality – a specific category in parliament’s register of MPs’ interests.
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Ms Duffield, who has previously clashed with the prime minister on gender issues, attacked the government for pursuing “cruel and unnecessary” policies as she resigned the Labour whip.
She criticised the decision to keep the two-child benefit cap and means-test the winter fuel payment, and accused the prime minister of “hypocrisy” over his acceptance of free gifts from donors.
“Since the change of government in July, the revelations of hypocrisy have been staggering and increasingly outrageous,” she said.
“I cannot put into words how angry I and my colleagues are at your total lack of understanding about how you have made us all appear.”
Ms Duffield also mentioned the recent “treatment of Diane Abbott”, who said she thought she had been barred from standing by Labour ahead of the general election, before Sir Keir said she would be allowed to defend her Hackney North and Stoke Newington seat for the party.
Her relationship with the Labour leadership has long been strained and her decision to quit the party comes after seven other Labour MPs were suspended for rebelling by voting for a motion calling for the two-child benefit cap to be abolished.
“Someone with far-above-average wealth choosing to keep the Conservatives’ two-child limit to benefit payments which entrenches children in poverty, while inexplicably accepting expensive personal gifts of designer suits and glasses costing more than most of those people can grasp – this is entirely undeserving of holding the title of Labour prime minister,” she said.
Ms Duffield said she will continue to represent her constituents as an independent MP, “guided by my core Labour values”.