An Auburn man and Russian national face money laundering charges for allegedly operating an unlicensed cryptocurrency transferring business that facilitated money laundering transactions, including for a North Korean cybercrime organization.
The U.S. Department of Justice indicted Roman Storm, 34, of Auburn, and Roman Semenov, 49, of Russia, on charges Aug. 23 for the creation, operation and promotion of Tornado Cash, a cryptocurrency mixer that facilitated more than $1 billion in money laundering transactions — and laundered hundreds of millions of dollars for a sanctioned North Korean cybercrime organization, according to a news release from the department.
Law enforcement arrested Stormon Aug. 23 in Washington.
Storm and Semenov both face one count of conspiracy to commit money laundering and one count of conspiracy to violate the International Economic Emergency Powers Act — both with a maximum penalty of 20 years in prison — in addition to conspiracy to operate an unlicensed money transmitting business, with a maximum penalty of five years in prison.
Storm and Semenov served as two of three founders of the Tornado Cash service that enabled customers to engage in untraceable transfers of cryptocurrency, according to the justice department.
Tornado Cash advertised to customers that the service provided untraceable and anonymous financial transactions, according to the department.
Storm and Semenov refused to implement any controls and continued to operate and facilitate the service despite receiving complaints and requests for help from victims of cybercrimes, according to the department.
In April and May of 2022, the Lazarus Group, a sanctioned North Korean cybercrime organization, used the Tornado Cash service to launder “hundreds of millions of dollars” in hacking proceeds.
In private chats, Storm and Semenov publicly announced changes in the service to adhere to sanctions, according to the department. In private chats, they agreed the change served as ineffective and continued to operate the service, helping the Lazarus Group transfer criminal proceeds from a cryptocurrency wallet the Office of Foreign Assets Control designated as blocked property.
The FBI and IRS-Criminal Investigation continue to investigate the case.