On August 23, the Office of Foreign Assets Control (OFAC) of the United States Treasury placed Roman Semenov, one of the co-founders of the Tornado Cash cryptocurrency "mixer," on its list of Specially Designated Nationals and Blocked Persons (SDN).

On the same day, another co-founder, Roman Storm, was arrested in Washington state by the Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigation division.

In an indictment released on Aug. 23, Semenov and Storm are charged with conspiracy to commit money laundering, conspiracy to commit sanctions violations, and conspiracy to run an unregistered money-transmitting business.

The first two crimes each carry a maximum prison sentence of 20 years. The crime of money transmission carries a maximum sentence of five years in jail.

In a statement issued by the Justice Department (DOJ), U.S. Attorney for the Southern District of New York Damian Williams said:

“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 follow the U.S. government crackdown on Tornado Cash which began in August of 2022, where OFAC placed 44 USD Coin (USDC) and Ether (ETH) addresses on the SDN list; effectively preventing U.S. citizens from utilizing the service.

Sources:

https://cointelegraph.com/news/tornado-cash-co-founders-charged-with-money-laundering-sanctions-violations-ofac

https://www.cnn.com/2023/08/23/business/tornado-cash-crypto-roman-storm/index.html