The co-founders of Russian cryptocurrency firm Tornado Cash were arrested Wednesday on charges of money laundering and sanctions violations, the Department of Justice announced, after they allegedly helped people launder $1 billion—including hundreds of millions of dollars for a sanctioned North Korean cybercrime group.
The Thurgood Marshall Federal Courthouse building in Manhattan.
Company co-founders Roman Semenov and Roman Storm were charged with conspiracy to commit money laundering and sanctions violations, as well as conspiracy to run an unlicensed money transmitting business, the Department of Justice announced in a statement on Wednesday.
Storm was arrested Wednesday, according to the DOJ.
Storm, who is from Washington state, and Semenov, a Russian native, allegedly helped to “other criminals launder and conceal funds using cryptocurrency,” Attorney General Merrick Garland said in a statement, following a criminal indictment filed in federal court in Manhattan.
In particular, federal officials accused the leaders of Tornado Cash of knowingly helping North Korean hacking group Lazarus in April and May of last year, even though those transactions were in violation of U.S. sanctions against the group.
The charges come one year to the day after the Treasury Department’s Office of Foreign Assets Control sanctioned the Ethereum-based mixer for its alleged connection with Lazarus, amid fears the crypto service—which allows users to conceal their transactions through untraceable transfers—aided hackers to launder crypto crime proceeds.
The Treasury Department accused the mixer last year of aiding criminal actors with money laundering since it was founded in 2019, including hundreds of millions of dollars allegedly stolen by hackers with the Lazarus Group.
Tornado Cash Devs Arrested for Allegedly Helping North Korean Hackers Launder $1B (CoinDesk)
Treasury Sanctions Ethereum-Based Tornado Cash For Allegedly Helping To Launder More Than $7 Billion (Forbes)