DOJ Targets Tornado Cash Co-Founder! Said to be Involved in a Theft Scheme

The United States Department of Justice (DOJ) has recently made significant moves in its ongoing efforts to combat crypto-related crimes. 

In a recent announcement, the DOJ indicted 12 additional individuals as part of a sprawling conspiracy linked to crypto crimes totaling a staggering $263 million. These individuals are accused of collaborating with Malone Lam, who was apprehended last September.

While a significant portion of the group's illicit activities involved sophisticated social engineering scams, the charges also include accusations of burglary. 

Adding another layer of complexity to the DOJ crackdown, they have also pressed charges against Roman Storm, a co-founder of the controversial cryptocurrency mixer, Tornado Cash.

DOJ Intensifies Focus on High-Level Crypto Crime

Despite earlier reports suggesting a potential scaling back of crypto enforcement efforts with the disbandment of its dedicated Crypto Enforcement Unit, the DOJ's recent actions clearly indicate a continued commitment to tackling significant crypto crimes. The indictment of these twelve defendants underscores this resolve.

According to the DOJ, "Allegedly participated in a cyber-enabled racketeering conspiracy throughout the United States and abroad that netted them more than $263 million. DOJ 's various roles included database hackers, organizers, target identifiers, callers, money launderers, and residential burglars targeting hardware virtual currency wallets."

The DOJ alleges that these defendants operated in concert with Malone Lam, identified as the ringleader of this criminal enterprise. 

Lam, who was arrested in September of last year, is accused of orchestrating the entire operation, from identifying victims and executing scams to laundering the ill-gotten gains.

The sophistication of the group's money laundering techniques allegedly allowed Lam to continue profiting from the scheme even after his arrest.

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Social Engineering and Escalating to Violent Theft

The DOJ investigation revealed that the majority of the $263 million was obtained through elaborate social engineering tactics and similar deceptive methods. 

The group reportedly systematically acquired and stole databases containing information on cryptocurrency users, identified high-value targets, and then launched coordinated efforts to defraud them.

Notably, Lam himself is accused of defrauding a single victim of a massive $230 million. However, the group's methods reportedly evolved to include more aggressive and dangerous tactics.

In a disturbing development, the DOJ alleges that the defendants resorted to burglary to steal hardware wallets. In one instance, Lam allegedly remotely monitored a target's iCloud metadata while a co-conspirator physically burglarized the victim's residence. 

This revelation highlights the increasingly brazen nature of crypto related crimes, echoing recent incidents like the prominent crypto kidnapping in France.

The indictments have named 10 of the 12 co-defendants, with authorities claiming that several arrests have already been made. However, at least two individuals remain unidentified and at large, believed to be residing in Dubai.

Tornado Cash Co-Founder Faces Charges

In a significant development that has sent ripples through the crypto community, the DOJ announced charges against Roman Storm, a co-founder of Tornado Cash. 

Tornado Cash is a cryptocurrency mixer designed to obfuscate the origin and destination of cryptocurrency transactions, a feature that has raised concerns among regulators regarding its potential use in money laundering and other illicit activities.

While the specific charges against Storm have not been detailed in this report, this action underscores the DOJ's focus on not only those directly involved in theft but also the infrastructure that potentially facilitates such crimes. 

Despite a perceived loosening of broader crypto enforcement, the Department of Justice is clearly determined to pursue prominent figures involved in the crypto space who are suspected of criminal activity.

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Conclusion

The DOJ alleges that the majority of the $263 million was obtained through social engineering scams, where victims were manipulated into revealing sensitive information or sending funds. 

The group also allegedly engaged in burglary to steal hardware cryptocurrency wallets.

This article provides an overview of the DOJ's recent actions targeting a crypto theft scheme and the co-founder of Tornado Cash. These developments underscore the ongoing efforts by law enforcement to combat criminal activity within the cryptocurrency ecosystem.

FAQ

Who is Malone Lam?

Malone Lam is identified by the US Department of Justice as the ringleader of a criminal conspiracy involved in crypto crimes worth $263 million. He was arrested in September of last year and is accused of organizing various illicit activities, including social engineering scams, money laundering, and burglary.

What is Tornado Cash?

Tornado Cash is a cryptocurrency mixer, a tool designed to obscure the transaction history of cryptocurrencies, making it difficult to trace the origin and destination of funds. This technology has raised concerns among regulators due to its potential use in facilitating money laundering and other illegal activities.

Why is the DOJ targeting a co-founder of Tornado Cash?

The DOJ has announced charges against Roman Storm, a co-founder of Tornado Cash, indicating a focus on not only individuals directly involved in crypto theft but also the platforms and services that may enable or facilitate such crimes. The specific charges against Storm have not been detailed in this report.