Author: US Department of Justice; Translator: LianGuai0xJS
Damian Williams, the federal prosecutor for the Southern District of New York, Merrick B. Garland, the US Attorney General, Christopher A. Wray, the Director of the Federal Bureau of Investigation (FBI), Nicole M. Argentieri, the Acting Assistant Attorney General for the Criminal Division of the Department of Justice, Matthew G. Olsen, the Assistant Secretary for National Security at the Department of Justice, James Smith, the Assistant Director-in-Charge of the FBI’s New York Field Office, and Bryant Jackson, a special agent with the Criminal Investigation Division of the Internal Revenue Service in Cincinnati, announced today the indictment of Roman Storm and Roman Semenov, charging them with conspiracy to commit money laundering, conspiracy to violate sanctions, and conspiracy to operate an unlicensed money transmitting business.
The indictment alleges that the defendants were involved in the creation, operation, and promotion of Tornado Cash, a cryptocurrency mixer that facilitated over $1 billion in money laundering transactions and enabled the Lazarus Group, a sanctioned North Korean cybercrime organization, to launder hundreds of millions of dollars. Roman Storm was arrested today in Washington state and will appear in the United States District Court for the Western District of Washington today. This case has been assigned to United States District Judge Katherine Polk Failla. Roman Semenov remains at large (he has been listed on the Office of Foreign Assets Control’s SDN sanctions list).
Damian Williams, the federal prosecutor for the Southern District of New York, said, “As alleged, Tornado Cash is a notorious cryptocurrency mixer that laundered over $1 billion and violated US sanctions. Roman Storm and Roman Semenov are alleged to have operated Tornado Cash and knew that it facilitated this money laundering. While publicly claiming to provide privacy services with sophisticated technology, they were actually helping hackers and fraudsters conceal the proceeds of their crimes. Today’s indictment serves as a reminder that money laundering through cryptocurrency transactions is illegal, and those involved in such laundering will be prosecuted.”
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Christopher A. Wray, the Director of the FBI, said, “Today’s announcement should serve as a reminder to criminal organizations around the world that they are neither untraceable nor anonymous. Whether you’re a hacker or a facilitator, you can’t hide behind a keyboard. The individuals charged today engaged in a conspiracy to launder money for cybercriminals, including laundering money for a North Korean cybercrime organization attempting to evade sanctions. As we’ve done in this operation, the FBI will continue to dismantle the infrastructure that cybercriminals use to profit from their crimes and hold accountable those who assist them.”
Nicole M. Argentieri, Acting Assistant Attorney General of the Criminal Division of the Department of Justice, said: “Cryptocurrency mixers have become a common method for criminals to conceal illegal proceeds. As alleged, the defendants operated Tornado Cash as a shelter for criminals to obfuscate the trail of funds related to criminal activities such as computer hacking and wire fraud. The Criminal Division will continue to prioritize investigating and prosecuting individuals who attempt to commit crimes in the cryptocurrency ecosystem.”
Matthew G. Olsen, Assistant Attorney General, stated: “As alleged in the indictment, the defendants’ cryptocurrency services facilitated over $1 billion in illicit transactions, inadvertently allowing a globally sanctioned cybercriminal organization to launder hundreds of millions of dollars for North Korea. The Department of Justice, together with our domestic and international law enforcement partners, will use all the tools in our arsenal to pursue and disrupt criminal networks engaged in violations of U.S. sanctions anywhere in the world.”
James Smith, Assistant Director in Charge of the FBI’s New York Field Office, said: “Today’s indictment of Tornado Cash co-founders Roman Storm and Roman Semenov highlights their alleged roles in creating a cryptocurrency mixer that ultimately became a gateway for over $1 billion in money laundering transactions. As alleged, when it became clear that a North Korean cybercriminal organization was using the platform to launder hundreds of millions of dollars from cyber attacks, Storm and Semenov turned a blind eye to the illicit activity and publicly claimed compliance with sanctions regulations. Today’s law enforcement action serves as a reminder to the public that in the face of illicit activity, the FBI is committed to tracking the untraceable and will continue to focus on protecting victims of financial crimes, whether those crimes are conducted through traditional banking systems or virtual currency blockchains.”
Bryant Jackson, Special Agent in Charge of the Criminal Investigation Division of the Internal Revenue Service in Cincinnati, said: “As alleged, Tornado Cash was used to launder over $1 billion. Criminal Investigation special agents utilize their financial expertise to trace the flow of cryptocurrency transactions and dismantle significant money laundering organizations attempting to conceal the source of their illicit funds. Today’s indictment is a direct result of our collaboration with domestic and international law enforcement partners. Through our joint efforts, those who profit illegally through deceit and fraud will be held accountable.”
According to the indictment revealed by the Manhattan Federal Court and court documents:
ROMAN STORM and ROMAN SEMENOV are two of the three founders of Tornado Cash, a cryptocurrency mixer that allows its customers to make untraceable cryptocurrency transfers. The defendants and their co-conspirators created the core functionality of the Tornado Cash service, paid for the critical infrastructure supporting the operation of the Tornado Cash service, promoted the Tornado Cash service, and profited millions of dollars from operating the Tornado Cash service. The Tornado Cash service advertised to customers the provision of untraceable and anonymous financial transactions. Roman Storm and Roman Semenov chose not to implement KYC policies or anti-money laundering procedures required by law. Consequently, the Tornado Cash service was used to launder over $1 billion in criminal proceeds. Roman Storm and Roman Semenov were aware of these money laundering transactions and received complaints and requests for assistance from hackers and other victims of cybercrime. However, they refused to implement any controls and continued to operate the Tornado Cash service and facilitate these money laundering transactions.
In April and May 2022, Tornado Cash service was accused of being used by the Lazarus Group, a North Korean cybercrime organization, to launder hundreds of millions of dollars in hacked funds. Roman Storm and Roman Semenov were aware that their Tornado Cash service was involved in these sanctions-violating transactions. They made changes to the service to publicly announce compliance with sanctions, but in their private chats, they agreed that this change would be ineffective. They then continued to operate the Tornado Cash service and facilitate further sanctions-violating transactions, helping the Lazarus Group transfer criminal proceeds from cryptocurrency wallets designated as frozen assets by the Office of Foreign Assets Control.
Roman Storm, 34, is from Auburn, Washington, while Roman Semenov, 35, is of Russian nationality. They are charged with one count each of conspiracy to commit money laundering and conspiracy to violate the International Emergency Economic Powers Act, with a maximum sentence of 20 years imprisonment for each offense. In addition, they are also charged with one count of conspiracy to operate an unlicensed money transmitting business, with a maximum sentence of 5 years imprisonment.
These maximum penalties are provided by Congress for informational purposes only, as any judgment against the defendants will be determined by the judge.
The case is being handled by the Money Laundering and Transnational Criminal Enterprises Unit of the United States Attorney’s Office and the National Cryptocurrency Enforcement Team (NCET) of the Criminal Division’s Computer Crime and Intellectual Property Section. Assistant U.S. Attorneys Thane Rehn and Benjamin Gianforti are prosecuting the case.
The establishment of NCET is aimed at combating the increasing illegal use of cryptocurrencies and digital assets. Within the Criminal Division’s Computer Crime and Intellectual Property Section, NCET conducts and supports investigations into individuals and entities involved in and facilitating various crimes using digital assets, with a particular focus on virtual currency exchanges, mixers and tumblers, and infrastructure providers. NCET also identifies strategic focuses in the field of digital asset technology, determines areas for increased investigative and prosecutorial focus, and leads departmental efforts to collaborate with domestic and foreign government agencies as well as the private sector in actively investigating and prosecuting crimes involving cryptocurrencies and digital assets.
The charges in the indictment are merely allegations, and the defendants are presumed innocent until proven guilty.