As the trial enters into its second week, David Patton, the lawyer representing Storm, has challenged the witness’ claims that her stolen cryptocurrency was laundered via Tornado Cash. The reports of this development have been covered by DL News and CoinDesk.

The witness, Hanfeng Ling, had previously testified that she fell prey to a pig butchering scam in 2021. She also asserted that a “crypto recovery service” she utilized indicated that some of the stolen funds had been funneled through Tornado Cash. However, Storm’s defense team expressed their inability to trace Ling’s funds back to Tornado Cash over the weekend.

Taylor Monahan, an Ethereum security expert, took to social media over the weekend to state that scammers do not typically use Tornado Cash. She made a series of posts detailing her belief that Ling’s funds were not laundered via Tornado Cash.

Storm’s trial, which started last week in a Manhattan federal court, sees him facing charges of conspiracy to commit money laundering and sanctions violations connected to his operation of Tornado Cash. If found guilty on all charges, Storm could be looking at a maximum sentence of 45 years in prison. He has entered a plea of not guilty.

Disclaimer: The Block is an independent media platform providing news, research, and data. Foresight Ventures, a majority investor in The Block as of November 2023, also invests in other crypto-related enterprises. Crypto exchange Bitget is an anchor LP for Foresight Ventures. Regardless, The Block continues to deliver objective, high-impact, and timely information about the crypto industry. The details of our financial disclosures can be found here.

© 2025 The Block. All Rights Reserved. This article is for informational purposes only and should not be considered as legal, tax, investment, financial, or other advice.

The post Trial of Tornado Cash Co-Founder Roman Storm Faces Possible Mistrial Due to Controversial Witness Testimony appeared first on Crypto Market Insights: Dive In with CryptoUpdate.io.

Storm took to social media platform X on Saturday, indicating that he is confronting a “critical deficit” and needs to amass $500,000 in the coming few days. He anticipates that he will require an additional $1 million in the forthcoming weeks to address the escalating costs of his legal defense.

“My team is tirelessly working to uphold code as free speech, safeguard software development, and resist governmental overreach that potentially threatens all of us,” Storm stated.

In May, Free Pertsev & Storm, a body established to offer legal assistance to the Tornado Cash founders, predicted that the total legal expenditure for Storm’s trial would amount to $2 million. However, Storm revealed on Friday that his legal expenses will surge to $3.5 million as his trial could extend up to four weeks, twice as long as the originally projected two weeks, due to “complex legal debates and unexpected witnesses and evidence.”

Storm was apprehended in August 2023 on charges of money laundering, conspiracy to operate an illegal money transmitter, and conspiracy to infringe US sanctions and could face a maximum sentence of 45 years in prison if convicted.

Earlier on Friday, Storm’s legal counsel endeavored to defer the trial, asserting that prosecutors disclosed a witness after the scheduled deadline. However, Judge Katherine Failla, overseeing Storm’s criminal trial, denied any mention of the US Treasury’s sanctions imposed on Tornado Cash, which were rescinded in March.

In April, the DeFi Education Fund, a crypto lobbying group, implored the Trump administration to halt the so-called “lawless prosecution” of open-source software developers, including Roman Storm.

As of now, Storm has managed to raise $1.96 million, approximately 57% of his target amount for the Tornado Cash trial. He is striving to amass a total of $3.5 million. As the donations are primarily made in Ether (ETH), the amount raised can vary. At the moment, ETH is trading at $3,030, marking a 2.9% increase in the past 24 hours, according to Nansen.

Bill Warren of MetaCartel stated that the MetaCartel DAO has contributed all the remaining funds in its treasury to support Storm’s cause. Last month, the Ethereum Foundation pledged to donate $500,000 and match community contributions up to $750,000 for Storm’s legal defense.

The post Crypto Pioneer Roman Storm Seeks Urgent $500K Support Amidst Upcoming Trial appeared first on Crypto Market Insights: Dive In with CryptoUpdate.io.

The contention revolves around Telegram messages obtained from Dutch authorities consequent to their prosecution of Tornado Cash developer Alexey Pertsev, who was sentenced to 64 months in prison by a Dutch court for enabling money laundering via Tornado Cash.

A specific message states, “Heya, anyone around to chat about axie? Would like to ask a few general questions about how one goes about cashing out 600 mil.” This message was referenced by Assistant U.S. Attorney Ben Arad during a July 8 hearing as an indication of the co-founders’ alleged guilt, as per the hearing’s transcript.

However, Storm’s legal team has presented filings indicating that the message was initially penned by Andrew Thurman, a senior tech reporter at CoinDesk, and later forwarded to a separate Tornado Cash chat by Pertsev.

The defense’s filing suggests that the government mistakenly credited the reporter’s Telegram message to Pertsev at the pretrial conference, implying that the government was also oblivious to this issue until the defense brought it up.

In response, the prosecutors acknowledged their initial extraction of the text messages, provided to the defense in September 2023, lacked the “forwarded” tag on forwarded messages, which resulted in the confusion. However, they asserted that they furnished the corrected version to the defense in December 2024, which is the version they plan to use at the trial.

Storm’s defense countered the accusation that they strategically delayed their motion until the last moment. They cited the misattributed quote as part of their argument for dismissing all Telegram chat evidence from Pertsev’s phone from the trial, and requested to examine grand jury transcripts, voicing “grave concerns about the integrity of the grand jury proceedings” due to the possibility of the government providing false information to the grand jury.

The prosecutors, in their reply, expressed regret for initially producing the messages without the forwarding information, but asked the judge to reject the defense’s motion to exclude the evidence.

The post Misquoted Message Allegedly Indicates Tornado Cash Co-Founders’ Guilt, Claims DOJ Prosecutor appeared first on Crypto Market Insights: Dive In with CryptoUpdate.io.

The New Zealand government’s decision stems from the rising concerns over potential connections between domestic criminals and international crypto operations. However, in a somewhat contradictory stance, the authorities have reassured that they will continue to support legitimate cryptocurrency businesses operating within the country.

The post New Zealand to Clamp Down on Crypto ATMs in Anti-Money Laundering Move, Pledges Support for Genuine Crypto Ventures appeared first on Crypto Market Insights: Dive In with CryptoUpdate.io.

This groundbreaking revelation is the culmination of an intensive 18-month probe into the world of cryptocurrency by a consortium of Australian law enforcement and intelligence agencies. Initiated in December 2023, the investigation was led by the Queensland Joint Organized Crime Taskforce (QJOCTF) and involved tracing the suspicious money flow of a ring member, leading to the unearthing of a complex and large-scale money laundering operation.

According to the authorities, the perpetrators laundered a total of $123 million using a convoluted system of front businesses and cryptocurrencies. This illicit money was then converted into cryptocurrencies.

Money laundering is a technique used by criminals to make illegally-acquired money appear legitimate. The highly structured process often involves three stages: placement (introducing the illegal money into the financial system), layering (obscuring the source of the money through a series of complicated transactions), and integration (redistributing the now “clean” money back to the criminals). This process is frequently used to purchase properties, luxury goods, and in this case, cryptocurrencies.

The Australian scam ring involved a multi-step scheme to evade Anti-Money Laundering (AML) measures. The key player was a security firm that transported illicit funds to its front businesses. These funds were then transferred to a car dealership, which served as the perfect front for money laundering due to its regular large cash transactions. Upon receipt, the dealership would mix the illegal funds with legitimate income during bank deposits, further obscuring their origin. These funds were then forwarded to a sales promotion company, which converted part of the proceeds into cryptocurrencies.

Following the revelation of this scheme, authorities swiftly acted to seize $170,000 worth of crypto assets, $30,000 cash, and business documents. Seventeen properties, cars, and funds in multiple bank accounts were also frozen, with the total value of the frozen assets amounting to around $21 million. The investigation continues with the potential for more individuals to be charged.

Despite occasional associations with illegal activities, the use of cryptocurrencies in criminal activities accounts for only a small fraction of total crypto volume. Cryptocurrency transactions are indeed anonymous, but each transaction leaves a permanent, traceable record on the public ledger, providing law enforcement agencies with a trail to follow. As this case demonstrates, the very features that may attract criminals can also lead to their downfall.

The post Unraveling Australia’s $123M Cryptocurrency Fraud: An Inside Look at Money Laundering Techniques appeared first on Crypto Market Insights: Dive In with CryptoUpdate.io.

The announcement was made on June 12 by Assistant Commissioner Mario Wong Ho-yin, who highlighted the need to extend cooperation with academic experts, regional finance professionals, and law enforcement agencies to effectively combat the increasingly sophisticated and cross-border nature of financial crimes.

During a press briefing, Wong emphasized, “The transnational and borderless nature of these money laundering threats means no single agency can combat this issue on its own”, as reported by the South China Morning Post. However, Wong refrained from divulging any specifics about the functioning of the tool, citing confidential elements associated with the department’s operations.

Between 2021 and May 2025, Hong Kong customs noted 39 significant money laundering cases, of which seven were related to cryptocurrencies. Most of these were trade-based laundering operations that disguised unlawful funds as routine transactions.

A notable case involved over 1,000 suspicious transactions totaling 1.8 billion Hong Kong dollars (approximately $229 million), spread across five companies and 18 local bank accounts. Three persons were apprehended, with two charged with channeling 760 million Hong Kong dollars via a cryptocurrency platform.

This week, the department and the university also organized a three-day workshop that brought together law enforcement and embassy staff from diverse jurisdictions, including China, India, Iran, New Zealand, Thailand, and Singapore, to enhance cross-border cooperation against digital financial crimes.

In related news, Iurii Gugnin, the founder of cryptocurrency payments platform Evita Pay, was recently detained in New York and indicted on 22 federal charges for allegedly laundering over $530 million from sanctioned Russian banks into the US. The US Department of Justice alleges that Gugnin used stablecoin transactions to assist Russian clients linked to blacklisted institutions, including Sberbank and VTB, in gaining access to American technologies that were otherwise restricted.

The alleged scheme was operational from June 2023 to January 2025, with Gugnin facing charges of wire fraud, money laundering, and running an unlicensed money-transmitting business. If found guilty, he could potentially face a life sentence.

The post Hong Kong Collaborates with University to Build Crypto Transaction Tracker to Combat Money Laundering appeared first on Crypto Market Insights: Dive In with CryptoUpdate.io.

On Monday, the DOJ slapped Gugnin with a 22-count indictment, with charges ranging from wire and bank fraud, money laundering, to operating an unlicensed money transmitting business, among other accusations. If found guilty, Gugnin could potentially be sentenced to life imprisonment. This case adds to a growing list of instances where cryptocurrencies have been used to skirt sanctions and launder money.

The DOJ asserts that from June 2023 to January 2025, Gugnin masterminded an extensive money laundering operation, processing Tether USDTUSD transactions for Russian clients connected to sanctioned banks such as Sberbank, VTB, Sovcombank, and Tinkoff. John A. Eisenberg, assistant attorney general for national security, stated that Gugnin transformed his crypto business into a “secret conduit for illicit money,” channeling around $530 million through the US financial system to aid sanctioned Russian banks and assist Russian consumers in procuring sensitive American technologies.

According to the DOJ, Gugnin misled US banks about Evita’s Russian connections, manipulated invoices to conceal client identities, and disregarded Anti-Money Laundering regulations, despite having registered Evita Pay as a money transmitting business in Florida using false declarations. The DOJ reached out to Evita Pay for comments, but none were immediately forthcoming.

Furthermore, the DOJ claims that Gugnin conducted online searches such as “Am I being investigated” and “signs you may be under criminal investigation,” suggesting that he was aware of his illegal activities. Gugnin now faces a potential 30-year prison sentence for each count of bank fraud, up to 20 years for each wire fraud count, and up to 10 years for failing to implement an effective Anti-Money Laundering program and failure to file suspicious activity reports. Conspiracy to defraud the US could add an additional five years to his sentence.

The post Crypto CEO Accused of Running a Stealth Money Laundering Channel, DOJ Reports appeared first on Crypto Market Insights: Dive In with CryptoUpdate.io.

On May 15, 12 suspects were arrested in both mainland China and Hong Kong. According to reports from the Hong Kong Commercial Daily, these individuals had been using others to create bank accounts for receiving proceeds from fraudulent activities. The funds were then converted into cryptocurrencies at various exchanges, effectively washing the illicit money.

The criminal syndicate had established a base in a residential unit within the Mong Kok neighborhood of Hong Kong. From here, they planned and executed their money laundering operations. Of the total laundered amount, over $1.2 million was connected to 58 individual fraud cases.

Police surveillance on May 15 led to the arrest of two recruits leaving the Mong Kok base. One was observed visiting a bank, whilst the other was seen at an ATM. Both were apprehended while attempting to convert the cash into cryptocurrencies at a local crypto exchange.

Before the funds could be laundered, police seized approximately HK$770,000 ($98,540) in cash. The remaining 10 suspects, aged between 20 and 41, were swiftly arrested. Law enforcement officers also confiscated HK$1.05 million ($134,370) in cash, over 560 ATM cards, multiple mobile phones, and bank documents and records related to cryptocurrency transactions.

Hong Kong law enforcement noted a 12% increase in fraud reports in 2024, leading to over 10,000 fraud-related arrests. Interestingly, around 73% of these arrests involved individuals who held fake bank accounts.

This case is part of a broader crackdown as Hong Kong continues to establish its cryptocurrency regulatory framework. This is aimed at fostering local innovation, protecting consumers, and positioning itself as a hub for cryptocurrency activities.

The post Hong Kong Authorities Unmask $15M Crypto-Backed Money Laundering Operation appeared first on Crypto Market Insights: Dive In with CryptoUpdate.io.

Jay Clayton, the acting US Attorney for Manhattan, informed federal court judge Katherine Polk Failla in a letter dated May 15 that while the charges against Storm remain, one element of the conspiracy to operate an unlicensed money transmitting business charge will be dropped.

“Upon reassessing the circumstances of this case, both this Office and the Office of the Deputy Attorney General have arrived at the conclusion that the prosecution aligns with the letter and spirit of the April 7, 2025 Memorandum from the Deputy Attorney General,” Clayton stated.

In an April memorandum, Deputy Attorney General Todd Blanche declared the DOJ’s decision to cease the implementation of “regulation by prosecution” for crypto. He also stated that the department would not prosecute crypto mixers such as Tornado Cash “for the acts of their end users or unwitting violations of regulations.”

As per Clayton’s announcement, the indictment against Storm will no longer include the allegation of failing to meet money transmitting business registration requirements. This charge had initially been pursued in connection with claims that Storm had illicitly operated Tornado Cash as an unlicensed money transmitter.

However, the government will proceed with the charge under the assertion that Storm transferred funds while being aware they were either proceeds from a criminal act or intended to aid illegal activities. The Justice Department has accused Tornado Cash of facilitating the laundering of over $1 billion in crypto, including for the state-backed North Korean hacking group, the Lazarus Group.

Clayton made it clear that the Justice Department still intends to bring forward the other two charges in its indictment: one count of money laundering conspiracy and one count of conspiracy to violate US sanctions. Each of these charges carries a maximum sentence of 20 years in prison. Meanwhile, the unlicensed money transmitter conspiracy charge could result in a maximum sentence of five years.

Storm, who has pleaded not guilty, is set to face trial on July 14. He was charged alongside co-founder Roman Semenov, who remains at large and is believed to be residing in his home country of Russia.

Other crypto executives facing similar charges have referred to Blanche’s memo in their attempts to have their cases dismissed. They include the co-founders of crypto mixer Samourai Wallet, Keonne Rodriguez and William Hill, and Braden John Karony, CEO of crypto firm SafeMoon.

The post Case Against Tornado Cash Founder, Roman Storm, Continues with Minor Changes appeared first on Crypto Market Insights: Dive In with CryptoUpdate.io.

The illegal operation allegedly facilitated money laundering for criminal networks involved in drug trafficking and illegal immigration. According to a statement released by Europol on May 14, the criminals operated a secret unregulated money transfer system known as hawala, often receiving payment in cryptocurrency.

The arrests included 15 individuals in Spain, one in Austria, and one in Belgium. Law enforcement authorities also seized assets worth 4.5 million euros ($5 million), including cash, cryptocurrency, 18 vehicles, four shotguns and multiple electronic devices.

From the total seized, 183,000 euros ($205,000) was in the form of cryptocurrency. An additional 421,000 euros ($471,000) in cash was recovered from 77 bank accounts tied to the criminal organization. Spanish media outlets referred to the operation as a ‘crypto mafia bank’.

Among the seized assets were luxury items such as bags, watches, and even cigars valued at 876,000 euros ($980,000). The operation spanned multiple countries, with raids carried out across Spain, Austria, and Belgium in January 2025, involving over 250 officers.

Most of the arrested individuals, predominantly of Chinese and Syrian nationality, have already been incarcerated for involvement in crimes linked to the organization. The group targeted clients in China and the Arabic-speaking criminal underworld.

The criminal group attempted to mask its illicit activities by operating a money transfer business and even promoted these services on social media platforms. The investigation was spearheaded by a court in Almeria, Spain, which aided Europol in coordinating Spanish and Belgian authorities to dismantle the operation.

Blockchain analysis company, Chainalysis, estimates that illicit cryptocurrency transactions reached $51.3 billion in 2024, up by 11.3% from the previous year.

The post Europol Cracks Down on ‘Crypto Mafia Bank’, Seizes $23 Million appeared first on Crypto Market Insights: Dive In with CryptoUpdate.io.