Tornado Cash Sanction Lifted, LIBRA Sued, Bithumb Raided: Weekly Crypto Legal Recap

US Treasury Lifts Sanctions on Tornado Cash but Maintains Them on Founder Semenov

The US Treasury’s Office of Foreign Assets Control (OFAC) has removed Tornado Cash, a prominent crypto mixing service, from its sanctions list, following a Fifth Circuit Court ruling that deemed its immutable smart contracts not to be 'property' under the International Emergency Economic Powers Act. This decision comes after the Treasury had previously blacklisted Tornado Cash in August 2022 due to its alleged facilitation of laundering over $7 billion by criminal organizations like the Lazarus Group. 

While several Ethereum addresses linked to Tornado Cash have been delisted, sanctions against one of its founders, Roman Semenov, remain in place, now solely for North Korea-related activities. Despite the delisting, Semenov and fellow founder Roman Storm are still facing legal challenges, having been charged in August 2023 with money laundering and sanctions violations related to the platform’s operations. The Treasury's delisting was finalized on March 21, 2025, after the announcement on March 18, 2025.

Debiex Ordered to Pay $2.5M for CFTC Romance Scam Fraud

Crypto platform Debiex has been ordered to pay approximately $2.5 million after a federal judge ruled in favor of the CFTC, which accused it of operating a romance scam that defrauded customers of around $2.3 million. The court found Debiex guilty of a “pig butchering” scheme, where scammers built relationships with victims on social media to solicit investments. The ruling included a civil penalty of nearly $221,500. Additionally, Zhang Cheng Yang was identified as a money mule, and digital assets worth approximately $119,500 will be transferred to a victim as part of the judgment.

Burwick Law Launches Class-Action Lawsuit Against LIBRA Backers for Alleged Fraud

Burwick Law has filed a class-action lawsuit against KIP, Meteora, and Kelsier in the Supreme Court of New York, alleging fraud and misleading practices in the LIBRA token launch. The lawsuit claims that these parties inflated LIBRA’s price and manipulated the market, employing tactics typical of a pump-and-dump scheme. Approximately 85% of the token supply was withheld at launch, leading to significant investor losses. The investigation also links LIBRA to other Argentina-themed tokens. The outcome may set a precedent for regulating token issuers and enhancing investor protection in the cryptocurrency market. Legal experts anticipate further developments.

Hollywood Director Arrested for $11 Million Netflix Fraud Scheme

Hollywood director Carl Erik Rinsch was arrested on March 19, 2025, charged with fraud and money laundering related to an alleged $11 million scam involving Netflix. Rinsch solicited investment for a planned science fiction series, “White Horse,” yet reportedly misappropriated the funds for personal expenses, including crypto trading and luxury purchases. The indictment, announced by U.S. Attorney Matthew Podolsky, revealed Rinsch demanded additional funding, ultimately transferring the money through various accounts before using it for securities speculation, resulting in a loss greater than $5.5 million. His extravagant spending included $2.4 million on luxury cars and significant credit card debt.

Gotbit Founder Aleksei Andriunin Pleads Guilty, Forfeits $23M in Crypto to US Prosecutors

Aleksei Andriunin, the Russian founder of Gotbit, has struck a plea deal with US prosecutors, agreeing to forfeit approximately $23 million in Tether (USDt) and USDC. He will plead guilty to three counts of conspiracy related to wire fraud and market manipulation, with the deal not binding the US Attorney General or other authorities. Andriunin, 26, was extradited to the US in October 2024 and has faced charges involving a scheme that manipulated cryptocurrency markets between 2017 and 2024. The investigation also involves other Gotbit employees based in Russia.

Bithumb Under Investigation for Allegedly Misusing Funds to Purchase Real Estate for Former CEO

Bithumb, a major South Korean cryptocurrency exchange, is under investigation by the Financial Supervisory Service (FSS) for allegedly misusing company funds to finance real estate purchases for its former CEO. Authorities raided Bithumb's headquarters to examine financial records linked to these claims. Founded in 2014 by Javier Sim, Bithumb has grown to dominate South Korea’s crypto market with over 8 million registered users and a trading volume exceeding $1 trillion. This investigation adds to the regulatory challenges the exchange faces, potentially impacting its future operations. The company has yet to respond to the raid or investigation publicly.