Two men charged by U.S. with laundering more than $1B in cryptocurrency

Federal authorities charged two men Wednesday with running a massive money laundering scheme that allegedly handled more than $1 billion in illegal transactions, including moving hundreds of millions of dollars worth of cryptocurrency for North Korean hackers linked to that country’s government.

The charges filed in Manhattan federal court accuse Roman Storm, of Washington state and his business partner Roman Semenov, a Russian citizen, of laundering money and violating sanctions through their business Tornado Cash, a cryptocurrency “mixer” that allegedly moved money for the Lazarus Group, a sanctioned North Korean cybercrime organization.

Authorities say the two men publicized their business as a privacy-focused financial service, when in fact they were knowingly scheming to help criminals hide their money.

Federal investigators say such “mixing” services are increasingly popular among all manner of cybercriminals as a means of hiding and moving illegal profits. But FBI Director Christopher A. Wray said in a written statement that such criminals “are neither untraceable nor anonymous. You can’t hide from us behind a keyboard — whether you’re a hacker or a facilitator.”

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In recent years, the Justice Department has put more resources and effort into pursuing criminals who use cryptocurrency as a means of hiding assets and evading law enforcement — a global cat-and-mouse game that can involve vast sums of money.

Storm and Semenov and a third, unidentified founder started Tornado Cash with a $900,000 investment from a California-based venture capital fund, according to the indictment. At one point, when the founders suggested they create a version of the service that would adhere to federal anti-money laundering and know-your-customer rules, the investors at the venture capital fund “dismissed the idea,” the indictment says. One of them allegedly wrote: “it would be unlikely that as a fund we’d use a ‘compliant mixer’.”

Authorities allege that Storm and Semenov knowingly allowed the Lazarus Group to launder money on behalf of the North Korean government in the spring of 2022. Storm has been arrested; Semenov remains at large, officials said.

The pair were charged with conspiracy to commit money laundering, conspiracy to violate U.S. sanctions and conspiracy to operate an unlicensed money transmitting business. If convicted on the most serious charge, they face up to 20 years in prison.

This is a developing story. It will be updated.

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