On Tuesday, November 17th, a federal grand jury has charged the developers of a cryptocurrency money laundering scheme known as “Tornado Cash” with money laundering. The individuals identified as Philip Durachinsky and Eduard Shaykhutdinov are accused of running a “mixer” that allowed users to deposit illicitly-obtained cryptocurrencies and subsequently receive other digital coins in return that were virtually untraceable.
The individuals allegedly ran the scheme from June 2019 to October 2020, resulting in roughly $30 million worth of cryptocurrencies being “cleaned” and mixed through Tornado Cash. Using the software, users could erase the trail of a coin’s original source. This would make it appear as if the funds came from a legitimate source. Investigators believe that Durachinsky and Shaykhutdinov assisted criminals looking to hide their illegal activities, such as drug dealing, ransomware, and human trafficking.
Durachinsky and Shaykhutdinov were charged with one count each of money laundering conspiracy, and one count of operating an unlicensed money transmitting business. If convicted, they could face a maximum of 20 years in prison.
The global investigation into digital money laundering is rapidly gaining pace, as the global cryptocurrency market comes under increasing scrutiny. This is the latest high-profile case of developers getting in trouble for facilitating the laundering of illicit funds while using a virtual asset in the form of cryptocurrency.
The announcement serves as a warning to crypto currency users who consider using services for mixing and transferring funds. Regulatory authorities continue to actively support the investigation and prosecution of individuals and businesses involved in virtual currency money laundering.
This case serves as an important reminder that while cryptocurrency provides anonymity and enables fast and easy transactions, it is not immune from criminal activities. Those who choose to use cryptocurrency must follow legal and government guidelines or risk serious penalties.
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