Roman Semenov, a co-founder of Tornado Cash graduated from Moscow State University where he studied Quantum Statistics and Field Theory. Following University, he worked in e-commerce and social media, having founded two companies in those fields. In 2017, Semenov branched into crypto, working as a Chief Software Architect at a foundation specifically focusing on Ethereum scalability. In 2018, he founded PepperSec, a white hat hacker security consultant agency, which led to the creation of Tornado Cash.

Roman Storm, another co-founder of the protocol, has a long resume of positions in the tech, blockchain and software world. He previously worked as a Software Engineer at Amazon and Marketron. He also served as the Chief Technology Officer at the POA Network. Storm also held a position as a Blockchain Developer for Blockchainlabz.nz. Together, he and Semenov founded PepperSec and started Tornado Cash.

Tornado Cash is entirely permissionless and runs a self executable code. In May of 2020, the developers destroyed their admin keys, which means that they themselves do not have the ability to see or alter any transactions that occur on their protocol. The team states that they do not have much oversight over the protocol aside from publishing code to GitHub, arguing that financial privacy is essential to freedom.

The cryptographic method (MPC) used to destroy their admin keys means that transactions on Tornado Cash are “trustless and completely unstoppable,” in the words of co-founder Roman Semenov. The level of anonymity means that transactions on Tornado Cash can even potentially evade sanctions.

The protocol is often criticized for its usage by hackers who can use it to store their stolen funds, and has been cited as a vehicle for money laundering. Despite the ultra secrecy of the protocol, some have argued that there may be a way to track transactions if there is a large deposit and low liquidity.

At the time of writing in August 2022, there are approximately 1.1 Million TORN coins in circulation. TORN has a maximum circulating supply of $10 million.

According to their whitepaper, the TORN tokenomics and token issuance schedule is as follows:

5% (500,000 TORN): Airdrop to early users of Tornado.Cash ETH pools

10% (1,000,000 TORN): Anonymity mining for Tornado.Cash ETH pools, distributed linearly over 1 year

55% (5,500,000 TORN): DAO treasury, will be unlocked linearly over 5 years with 3 month cliff

30% (3,000,000 TORN): Founding developers and early supporters, will be unlocked linearly over 3 years with 1 year cliff

On August 8th 2022, Tornado Cash was officially sanctioned by the U.S after a series of allegations that the coin mixer had been used to launder money from American citizens.

Specifically, the U.S Treasury Department claims that over $7 billion in digital assets has been laundered through Tornado Cash over the past 3 years. The announcement of these sanctions brought about a massive price drop, some high level trolling and even an arrest.

An anonymous Tornado Cash user has been sending 0.1 ETH to public accounts of celebrities and other high-profile users, potentially implicating their accounts and underscoring the question of what these sanctions actually mean for crypto users. In terms of other legal repercussions, a 29 year old software developer at Tornado Cash has since been arrested.

Learn more about the concept of Privacy Coins and the legal issues surrounding them.

Find out more about Monero — one of the top anonymous cryptocurrencies.

Read more about Helix — a pioneer in “Bitcoin” mixing technology.

Interested in deeper analysis and industry leading reports? Check out CMC Research.

New to this space and want to learn more? Visit CMC Alexandria, our educational portal.