Two men behind a cryptocurrency mixing service stand accused of laundering more than $1bn for criminal hacking groups.
The US Department of Justice says that Roman Storm, of Washington state, and Roman Semenov, of Russia, knowingly used their Tornado Cash mixing service to help members of Lazarus group hide the illegal sources of their income.
Both stand accused of conspiracy to commit money laundering and conspiracy to commit sanctions violations, as well as conspiracy to operate an unlicensed money transmitting business.
It is alleged that the two Romans allowed the North Korea-based Lazarus crew to throw investigators off their trail by using Tornado Cash to hide the source and destination of their stolen cryptocurrency. Prosecutors say that over the course of its operation Tornado Cash was used to launder at least $1bn in stolen currency, with Lazarus Group alone accounting for hundreds of millions.
Cryptocurrency mixing services operate in something of a grey area both morally and legally. While the services do provide legitimate use cases for preserving user privacy when making transactions, they are also ideal for laundering stolen currency and will often be used by cybercriminals to conceal their illegal activities.
The DOJ believes that Storm, 34, and Semenov, 49, knew full well that their service was being taken advantage of by criminal hackers and the pair allowed the activity to go unchecked.
"Roman Storm and Roman Semenov allegedly operated Tornado Cash and knowingly facilitated this money laundering," said US Attorney for the Southern District of New York Damian Williams.
"While publicly claiming to offer a technically sophisticated privacy service, Storm and Semenov in fact knew that they were helping hackers and fraudsters conceal the fruits of their crimes."
Storm has been arrested and is set to stand trial in the Western Washington US District Court. Semenov, who is believed to operate out of Russia, has not yet been arrested.
It is believed by prosecutors that Lazaus took advantage of Tornado Cash to launder hundreds of millions of dollars in illegally-obtained funds.
With the reclusive dictatorship facing tough economic sanctions, it is widely believed that the DPRK has become reliant on criminal hacking groups such as Lazarus to help fill its coffers via cryptocurrencies. Those who aid North Korean groups in their efforts risk jail time for violating US economic sanctions.
That is the case for Storm and Semenov, who have in addition to their money laundering and unlicensed money transferring charges will face the sanctions violation charge.
