DOJ insists Twister Money operated as a ‘business enterprise’

In a latest 111-page court docket submitting, federal prosecutors have responded to a movement by Twister Money co-founder Roman Semenov to dismiss prices of conspiracy and cash laundering in opposition to him.

The federal government argues that characterizing Semenov’s alleged crime as merely writing code obscures his position in selling and sustaining the Twister Money service, even when he knew it was getting used to launder illicit proceeds from hacks.

The prosecutors’ movement asserts that the Twister Money service was a “business enterprise carried on for revenue or finanancial [sic] acquire” and that Semenov himself profited from its operation by way of his management, together with others, of key parts of the service.

The federal government alleges that whereas it was potential to entry the sensible contracts powering Twister Money instantly, most customers relied on the native interface, and 98% of customers utilized the optionally available relayer community, which was arrange and operated by relayers manually whitelisted by Twister Money’s co-founders till March 2022.

Responding to Semenov’s argument that Twister Money was not a money-transmitting enterprise, the prosecutors contend that the service “brought on all of those actions to happen behind the scenes and with none additional motion by the shopper.”

The prosecutors additionally declare that based mostly on the fundamental definitions beneath the Twister Money phrases of service, the platform was “transferring funds” because it executed buyer deposits and withdrawals.

The federal government additional alleges that actions taken by Semenov and his co-founder Roman Storm to maintain Twister Money operating, comparable to funds to host the location, paying fuel charges for blockchain transactions, “refusing” to implement correct anti-money laundering packages, sustaining the relayer community, and creating new options to reinforce anonymity, are a part of the charged conspiracy.

The prosecutors level to Semenov’s personal alleged admission of consciousness that Twister Money was getting used for unlawful functions, quoting a message he despatched to the opposite founders: “guys we’re fucked.”

Although the Twister Money builders carried out a UI change to display screen out OFAC-sanctioned wallets, the federal government alleges this motion was inadequate to stop illicit exercise by the Lazarus Group, a North Korean hacking group.

“Although they knew the UI change could be ineffective, they made public statements suggesting they have been in compliance with the regulation. Then, regardless of acquiring affirmation that the UI change was ineffective, Semenov and the Twister Money founders took no additional motion to stop the Lazarus Group’s continued use of the Twister Money Service to launder funds and evade sanctions, which they knew was ongoing,” the movement detailed.

Pushing again in opposition to efforts by crypto advocacy teams to solid the case as a risk to the liberty to put in writing code, the prosecutors argue they’re pursuing a narrower case that “doesn’t current the query of what circumstances, if any, would give rise to legal legal responsibility for a defendant whose solely conduct consisted of writing code for sensible contracts that have been then deployed on the Ethereum blockchain.”

Regardless of this stance, the federal government maintained that operational logic of Twister Money implied that it required restrictions, pointing to Semenov’s alleged switch of $2.7 million in Twister Money earnings to unidentified chilly wallets. Allegedly, this was carried out by way of using a VPN and a Binance account with a false identification.