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The FBI said they caught Roman Storm, but they’re still looking for Roman Semenov.

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The creators of Tornado Cash, Roman Semenov and Roman Storm, are facing legal problems. Semenov is on a list of people with restrictions, and Storm got arrested. The United States is getting stricter about crypto mixers.

Semenov is still not caught, but one of the other creators, Alexey Pertsev, was arrested in the Netherlands in August 2022 for moving money around illegally.

Semenov and Storm are being accused of planning to hide illegal money, not following the rules about trade restrictions, and doing money-related things without permission. This information came out on August 23. If they’re proven guilty, they might have to go to jail for up to 20 years for the first two accusations, and up to 5 years for the money-related charge.

Tornado Cash Co-Founders Accused of Helping Criminals

According to Damian Williams, a U.S. Attorney, the people behind Tornado Cash said they offered privacy help, but they actually helped hackers and crooks hide their illegal money.

The government in the U.S. is trying to stop Tornado Cash. This is part of their bigger plan to take action against it. People in the crypto world are pushing back against the government’s actions, filing lawsuits and being worried about the Treasury Department’s power.

The U.S. Department of Justice (DOJ) and OFAC are saying that Tornado Cash is linked to moving money for the Lazarus Group, a group connected to North Korea. They also say it’s connected to other hacking cases. The DOJ says Tornado Cash moved more than $1 billion of illegal money.

Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.

#CryptocurrencyNews #NFT #Web3 #Blockchain #TornadoCash

Tornado Cash developer Alex Pertsev is set to be released on bail by a Dutch court after spending almost nine months in jail on charges of facilitating money laundering. The developer will be released under surveillance and required to wear an ankle bracelet so that authorities can monitor his movements. The decision marks a reversal of November 2021 ruling that Pertsev posed a flight risk.

The Tornado Cash developer faces money laundering charges over allegations that he wrote the code for the crypto mixing service, which has been used to process dirty money. The US Treasury has added Tornado Cash to its Specially Designated Nationals list, effectively banning Americans from using the service.

The decision to release Pertsev has been welcomed by many in the crypto community, who argue that the arrest of the developer contradicts the ethos of free code. Others have criticized the expectation that smart contracts should prevent deposits of criminal proceeds, describing it as essentially a ban.

The case highlights the challenge of balancing the need to prevent money laundering with the principles of decentralized systems and open-source code. While regulators have taken steps to crack down on crypto-related money laundering, some have argued that this risks stifling innovation and may ultimately be ineffective in preventing illicit activity.

Takeaways:

Tornado Cash developer Alex Pertsev is set to be released on bail under surveillance after spending nine months in jail on money laundering charges.

The US Treasury has added Tornado Cash to its Specially Designated Nationals list, banning Americans from using the service.

The decision to release Pertsev has been welcomed by some in the crypto community, while others have criticized the expectation that smart contracts should prevent deposits of criminal proceeds.

Conclusion:

The case of Alex Pertsev highlights the tension between preventing money laundering and preserving the principles of decentralized systems and open-source code. While regulators have taken steps to crack down on crypto-related money laundering, the case raises questions about the effectiveness of such measures and their potential impact on innovation. The release of Pertsev on bail provides some relief for those concerned about the impact of regulatory actions on the development of new technologies.

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Despite a relative lull in the global crypto market, Bitcoin (BTC) surged above $67,000 this week. In contrast, memecoins dominated the charts in the last few days, with Floki, Pepe, Bonk, Shiba Inu, and others leading the way.
Notably, PEPE hit a new all-time high shortly after GameStop stock trader Keith Gill posted to his Roaring Kitty X account for the first time in three years. 
Although this week was relatively quiet, we have compiled six top stories you might have missed but will find intriguing. Let's take a closer look at some of these stories that you wouldn't want to miss.
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TOP CRYPTO NEWS RECAP (May 12–May 18, 2024)
●      Tornado Cash Developer Sentenced for Money Laundering
●      Institutional Investors Pour Billions into Bitcoin ETFs
●      Meme Coin Frenzy: Over 1 Million New Tokens Launched Since April
●      Circle Moves Legal Base to the United States Ahead of IPO
●      DTCC and Chainlink Successfully Pilot Fund Data Tokenization
●      Senate Votes to Overturn SEC Crypto Rule; Biden Threatens Veto
Tornado Cash Developer Sentenced for Money Laundering
Alexey Pertsev, developer of Tornado Cash, was sentenced to five years and four months in prison by Dutch judges for laundering $1.2 billion in illicit assets. Despite Tornado Cash being a noncustodial protocol, Pertsev was held accountable for not preventing money laundering. This case raises concerns for open-source developers about potential liability for code misuse. Pertsev's legal team has 14 days to appeal the ruling.
Institutional Investors Pour Billions into Bitcoin ETFs
Over 600 firms disclosed $3.5 billion in spot Bitcoin ETF investments in recent SEC filings. Millennium Management leads the investments with $1.9 billion, followed by Schonfeld Strategic Advisors with $479 million. Other major investors include Morgan Stanley, JPMorgan, and Wells Fargo. Despite a recent decline in inflows, institutional investment in Bitcoin ETFs remains substantial, reflecting strong interest and confidence in the cryptocurrency market.
Meme Coin Frenzy: Over 1 Million New Tokens Launched Since April
Since April 1, over one million new crypto tokens have been created, with 372,642 on Ethereum and 643,227 on Solana. A significant portion, especially on Solana, consists of meme coins. Coinbase’s layer-2 blockchain Base saw 88% of Ethereum's new tokens. This surge, driven by low costs and meme coin popularity, has led to concerns over scams and the proliferation of low-value tokens.
Circle Moves Legal Base to the United States Ahead of IPO
Circle, the company behind USD Coin, is relocating its legal base from Ireland to the U.S. to align with stricter U.S. cryptocurrency regulations and prepare for an upcoming IPO. This strategic move aims to boost investor confidence despite higher compliance costs. By adhering to U.S. regulatory standards, Circle seeks to enhance transparency and adoption, positioning itself competitively in the stablecoin market.
DTCC and Chainlink Successfully Pilot Fund Data Tokenization
The Depository Trust and Clearing Corporation (DTCC) and blockchain oracle Chainlink completed a pilot program with major U.S. banks, including JPMorgan and BNY Mellon, to tokenize traditional finance fund data. The Smart NAV Pilot utilized Chainlink's Cross-Chain Interoperability Protocol to bring net asset value (NAV) data on-chain, enhancing automated data management and enabling various on-chain use cases. This initiative supports future financial industry innovations and broader API solutions for price data.
Senate Votes to Overturn SEC Crypto Rule; Biden Threatens Veto
The U.S. Senate passed a resolution, 60-38, to nullify the SEC’s Staff Accounting Bulletin No. 121, which requires banks to keep customers’ digital assets on their balance sheets. Critics argue this stifles innovation. President Biden intends to veto the resolution to protect investors and the financial system. If vetoed, Congress needs a two-thirds majority to override. This marks a significant bipartisan move on crypto legislation.
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A malicious proposal allowed an unidentified attacker to take over Tornado Cash, opening up the floodgates to a potential treasury drain.

The #DAO handling operations, funds and future plans of privacy-focused crypto mixer #TornadoCash was effectively taken over by an unidentified attacker, or group of attackers, on Saturday.

DAOs, short for #decentralized autonomous organizations, allow token holders to lock up their holdings as votes for proposing changes to a project. These changes can range from deploying treasury funds to purposes that benefit the project to expansion on other networks.

At the start of the weekend, the attacker floated a malicious proposal that hid a code function that granted them fake votes that can now be used to handle some aspects of Tornado Cash, such as torn (TORN) tokens held in the main governance contract or withdrawal of locked torn tokens.

This was done by putting forth a proposal that imitated an earlier version – except with some malicious code that allowed for the update of logic that gave the attacker access to all governance votes.

“Now that they have all the votes, they can do whatever they want,” security research @samczsun tweeted on Sunday. “In this case, they simply withdrew 10,000 votes as TORN and sold it all.”

@samczsun.com@samczsun

As such, this attack does not impact the actual Tornado Cash protocol – which allows users to pass funds through the service to mask or obscure the movements of funds and #crypto addresses. This attack was not an exploit of any smart contracts or technology related to the working of Tornado Cash.

Meanwhile, the Tornado Cash community has put up newer proposals that seek to revert changes made to the code. One community member observed that the attacker had maliciously minted over 1 million torn for themselves, worth over $4 million at current prices.

source: coindesk

image source: ai

#CryptoDailyDigest

Disclaimer

The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.

Incident Overview
Prisma Finance, a decentralized finance (DeFi) platform, is currently grappling with security concerns after a hacker transferred $2.6 million in assets to Tornado Cash. This event, part of a larger exploit that drained a total of $11.6 million from the platform, has sparked intense scrutiny and skepticism within the DeFi community, especially with claims of a "whitehat rescue" complicating the situation.
Exploit Details
The security breach targeted individual vaults on Prisma Finance, leading to an immediate and strategic response from the platform's team. Blockchain security firm PeckShield detected suspicious on-chain activity on March 28, revealing that approximately 3,257 ETH, equivalent to $11.6 million, was siphoned off from Prisma Finance. In reaction, the Prisma Protocol was temporarily halted by an emergency multisig to safeguard the remaining assets.
Despite the setback, Prisma Finance reassured its users, emphasizing that stablecoins such as mkUSD and ULTRA were still overcollateralized and secure. Yet, the platform's total value locked suffered a significant drop, plummeting from about $220 million to $115 million.
The Claim of a "Whitehat Rescue"
Following the exploit, the perpetrator claimed to have conducted a "whitehat rescue," intending to return the stolen funds. Messages embedded within the blockchain transactions have lent some credence to this assertion. However, the DeFi community remains wary, with many doubting the authenticity of this so-called rescue operation.
Further investigation by PeckShieldAlert into recent blockchain transactions highlighted the hacker's subsequent moves. Initially, 757.69 ETH worth approximately $2.7 million was moved to one address, followed by another transfer of 740 ETH, amounting to roughly $2.6 million, to an address linked to Tornado Cash. These actions have introduced additional layers of complexity to the ongoing investigation and raised questions about the hacker's true intentions.
Current Status and Market Impact
As of the latest reports, Prisma Finance's live price is $0.267253, witnessing a 24-hour trading volume of $8.47M USD. The recent developments have led to a sharp 24.20% decrease in its value over the last day, underscoring the adverse effects of the exploit on investor confidence.
The unfolding saga around Prisma Finance continues to shadow the platform with uncertainty. The drop in total value locked, combined with the ongoing probe into the hack and the perpetrator's recent financial maneuvers, spotlight enduring concerns over the security measures and future stability of Prisma Finance.
#crypto #Prisma #TornadoCash

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