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Crypto Mixing is Just Money Washing… Who Knew?

Tornado Cash's co-founders have been charged with money laundering and sanctions violations. Also XRP falls back to earth, Bitcoin Ordinals' short-lived existence, Maple Finance gets a boost, and DBS pushes sustainability in the metaverse.

August 24, 2023

Table of Contents

Welcome to Blockhead's Daily Digest, your go-to source for staying informed on the dynamic and ever-changing world of cryptocurrency. Whether you're a seasoned investor, blockchain enthusiast, or simply curious about the latest developments, we've got you covered with the most comprehensive news and analysis.

You knew it, we knew it, and now the Justice Department knows it: crypto mixing is a great way to launder money. The realisation comes as Russian Tornado Cash founders Roman Storm and Roman Semenov have been charged with laundering over $1 billion in criminal proceeds.

Charges include conspiracy to commit money laundering and operating an unlicensed money-transmitting business. The crypto mixer also allegedly violated sanctions by laundering money hundreds of millions of dollars for the North Korean hackers Lazarus Group.

Storm was arrested Wednesday in Washington state but Semenov remains at large. Alex Pertsev, another found is facing trial in Amsterdam.

Was the Tornado Cash Team Really Just Writing Code?
Here we are going to explore how true this narrative really is.

Tornado Cash operated under the veil of privacy protection through crypto mixing but blockchain analytics firm Elliptic traced $1.5 billion in laundered money linked to criminal activity through the service. The U.S. Treasury estimates over $7 billion worth of virtual currency through the platform since its launch in 2019.

“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,” said U.S. Attorney Damian Williams.

The Russians have fought back against the allegations with Storm's lawyer Brian Klein stating the prosecutors chose to charge him based on "a novel legal theory with dangerous implications for all software developers."

“Mr. Storm has been cooperating with the prosecutors’ investigation since last year and disputes that he engaged in any criminal conduct," he added.

Klein also claimed, "There is a lot more to this story that will come out at trial.” Perhaps this story isn't over yet...


  • XRP's Falls Back to Earth: The price rally for XRP, Ripple's cryptocurrency token, which followed Ripple Labs' victory over the SEC, has been short-lived. The cryptocurrency has now relinquished all its gains, reflecting the volatile nature of the market and the challenges ahead for Ripple. The token reached US$0.83 on July 20, but prices are now back to where they were before the SEC ruling, at around $0.50.
  • Bitcoin Ordinals Are Dead: Bitcoin ordinals – Bitcoin's version of NFTs – trading is facing a rough patch, with volumes plummeting to concerning levels. Last week, a report surfaced showing Bitcoin Ordinal sales volumes had dropped 97% from May to August. The decline is not just a blip but seems to be indicative of a broader trend, raising questions about the sustainability and appeal of this trading segment.
  • Maple Finance's Ambitious Expansion Plans Post-Investment:
    Decentralized corporate bond platform Maple Finance is gearing up for an aggressive expansion following a substantial investment injection. The platform's vision of offering innovative financial solutions is set to get a boost, promising a richer ecosystem for users.
  • GUUD Partners with Intraco to Launch Trade Finance Token on SDAX: Global trade tech platform GUUD and SGX-listed Intraco are collaborating to debut a trade finance and supply chain assets token for accredited investors on the private markets investment platform SDAX. Merging GUUD's trade financing solutions with Intraco's tokenisation expertise, the partnership aims to transform trade finance asset management and enhance supply chain efficiency. The initiative will tap into SDAX's extensive distribution network, promising fresh liquidity avenues.
  • DBS Launches Metaverse Adventure to Tackle Global Food Waste: DBS has introduced a metaverse experience on DBS BetterWorld, its metaverse on The Sandbox, aiming to use the virtual realm for positive change. This immersive journey underscores the pressing issue of global food waste, and the bank said it wants to use the metaverse to raise ESG awareness. The experience features activities inspired by five businesses, including Brewerkz, Breer, GreenPrice, Edible Garden City, and Rooftop Republic, each offering unique solutions to food waste. Singapore-based players can earn rewards redeemable via DBS PayLah! The platform will be open to the public upon the launch of The Sandbox’s Alpha Season 4.


CertiK: White Hat or Black Sheep?

CertiK: White Hat or Black Sheep?

The security firm faces accusations of extortion after exploiting a vulnerability in Kraken, a major cryptocurrency exchange. CertiK allegedly demanded a ransom for the return of stolen funds instead of following responsible disclosure procedures.