A Dutch court has sentenced Tornado Cash developer Alexey Pertsev to five years and four months in prison for laundering .2 billion through the cryptocurrency mixing service. The case represents a pivotal moment for decentralized finance (defi) regulation and crypto privacy. Dutch Court Imprisons Tornado Cash Developer for .2 Billion Money Laundering via Crypto Mixing […]
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Coin Center Warns of DOJ Overreach in Tornado Cash, Samourai Wallet Cases
The recent actions by the Department of Justice (DOJ) against non-custodial crypto wallet developers have sparked controversy and concern within the cryptocurrency community. According to Coin Center, these charges mark a significant shift from previous U.S. policies regarding money transmission, potentially impacting the liberty and privacy rights of developers and users alike. Coin Center: DOJ […]
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Does Money Transmitting Require Control? DOJ Says No in Tornado Cash Litigation
Since the Department of Justice (DOJ) filed its legal opposition to the pretrial motions of Tornado Cash developers Roman Storm and Roman Semenov, there has been a buzz within the cryptocurrency community regarding specific aspects of the court filing. A key point raised by the prosecutors is their belief that the definition of “money transmitting” […]
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DOJ Counters Motion to Dismiss Charges Against Tornado Cash Developer
In a notable development, the U.S. Department of Justice (DOJ) has countered a motion to dismiss the criminal charges against Roman Semenov, a developer of the cryptocurrency mixing service Tornado Cash, highlighting the alleged strength of its case in a recent court submission. Prosecutors Assert Strong Evidence Is Coming in Tornado Cash Laundering Case The […]
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Heco Bridge Hacker Moves $137 Million in Stolen ETH to Tornado Cash
In a recent development observed by onchain alerts, the entity responsible for exploiting the Heco bridge and siphoning off millions in ethereum late in November 2023 from the conduit bridge connecting Ethereum and the Heco blockchain, transferred 40,391.8 ether to the mixing platform Tornado Cash. Heco Bridge Exploiter Transfers Millions Worth of Ether to Tornado […]
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Dutch Prosecutors Reportedly Charge Tornado Cash Developer With Money Laundering
Alexey Pertsev, a developer for Tornado Cash, has reportedly been indicted by prosecutors in the Netherlands. They accuse him of laundering .2 billion. Pertsev’s attorney confirmed the prosecutors’ intent to charge his client. According to Dutch prosecutors, while a crypto-mixing service is not “inherently illegal,” using it to launder criminal assets is punishable. Dutch Prosecutors […]
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Arbitrum Proposal to Fund Tornado Cash Developers Defense Withdrawn
A proposal aiming to contribute to funding the legal defense of the developers of Tornado Cash, the Ethereum-based mixing platform, was removed by the Arbitrum community over apparent legal concerns. Devansh Mehta, lead of the working group of the Arbitrum treasury, criticized the move, stating that there was “absolutely nothing wrong with paying for the […]
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User Alert: Tornado Cash Developers Warn of Risk to Funds Deposited Since Jan. 1
Tornado Cash developers have issued a scam warning to cryptocurrency users who made deposits via the IPFS’ gateways between Jan. 1 and Feb. 24. Developers suspect that an exploiter may have “leaked” Tornado Cash deposits during this period to a server under their control. ‘Malicious Javascript Code’ Developers of Tornado Cash, a smart contract-based cryptocurrency […]
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Tornado Cash Co-Founder Braces for Precedent-Setting Trial in US
Roman Storm, facing multiple federal charges related to his role in the creation of Tornado Cash, is bracing for a trial in the United States. Scheduled for September 2024, the trial could have far-reaching implications for the crypto industry and digital privacy laws.
Roman Storm Pledges Vigorous Defense in Upcoming U.S. Trial
Tornado Cash co-founder Roman Storm is readying for what he considers a major precedent-setting trial in the United States. Storm, who faces multiple charges including money laundering and violating the International Emergency Economic Powers Act, articulated his resolve to mount a “strong defense” in his upcoming September 2024 trial. This statement was made in a Jan. 22 video post on X.
Storm, along with his alleged co-conspirator Roman Semenov, was indicted in August 2023. After his arrest, Storm was released on a million bond. Storm has resolutely declared his innocence by pleading not guilty to the charges levied against him.
Storm’s case has garnered widespread attention, especially within the Web3 and software privacy communities. He emphasized the broader implications of his legal battle, saying:
Whether you’re [a] passionate developer like me involved with Web3 or just care about software and privacy, this legal battle will affect you. So please help contribute to my legal defense, because this case will set [a] major precedent for years to come.
According to the U.S. Department of Justice, Tornado Cash is accused of laundering over billion in digital currency, with a notable portion linked to North Korean hackers. The indictment accuses Storm and Semenov of intentionally designing Tornado Cash to enable cybercriminals to anonymize blockchain fund transfers. This includes a reported involvement in laundering part of the 0 million stolen in a March attack on the Ronin Network, an Ethereum sidechain.
U.S. Attorney Damian Williams labeled Tornado Cash as an “infamous cryptocurrency mixer” and accused Storm and Semenov of knowingly facilitating money laundering and violating U.S. sanctions. These charges are part of a broader crackdown by the Department of Justice on entities implicated in cybercrime and sanction evasion.
Those that wish to donate towards Roman Storm’s legal defense can do so at https://wewantjusticedao.org/
How will Roman Storm fair in his upcoming U.S. trial? Share your thoughts and opinions about this subject in the comments section below.
Gamma Heist — Over $3M in Digital Assets Drained, 1,000 ETH Moved to Tornado Cash
On Jan. 4, the decentralized finance protocol Gamma Strategies was a victim of a hacking attack which saw criminals make off with digital assets worth over million. To pre-empt further attacks, Gamma Strategies said it has shut off all deposits on any of its “public-facing vaults.”
Hacker Transfers 1,000 Ethereum to Crypto Tumbler Tornado Cash
On Jan. 4, 2023, the decentralized finance (defi) protocol Gamma announced its platform had been breached in a cyber attack, resulting in the theft of digital assets valued at several million dollars. In response to thwart additional security breaches, Gamma reported it has ceased all deposits into its “public-facing vaults.”
According to a series of alerts issued by the blockchain security company Peckshield, the exploiter-labeled address has been transferring or swapping digital assets from the hack. For instance, the security firm said it detected that the exploiter address “bridged and transferred 800.5 $ETH (worth ~.8M).” Before this, the exploiter address had moved 1,000 ETH to the decentralized cryptocurrency tumbler Tornado Cash.
Our vaults have 4 main sources of deposit protection against flashloans:
1.) Mandating a ratio of token0 and token1 in accordance with the ratio in the pool
2.) Setting a price change threshold, such that deposits will be disallowed when price change exceeds a certain amount
3.)…— Gamma (@GammaStrategies) January 4, 2024
In a post on X, the Gamma team insisted that the steps taken so far, including shutting down deposits, effectively nullify further attacks. The team nevertheless suggested that the set price change threshold might be the reason why the protocol became a victim of the attack.
“The main issue is with the settings we placed on (2) the price change threshold. It was placed too high allowing for up to 50-200% price change on certain LST and stablecoin vaults. This allowed the attacker to manipulate the price up to the price change threshold and mint a disproportionately high number of LP tokens.,” the Gamma team said.
To prevent hackers from carrying out a similar attack, Gamma said it is setting all price change thresholds to “a safe threshold level.” Additionally, third parties will now be required to review the code before the deposit functionality is reopened. Gamma has also promised to maximize “recovery for all affected users.”
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