Accused Auburn Man Helped Launder $1 Billion in Virtual Currency for Criminal Actors

Introduction

An Auburn man is accused of helping launder over $1 billion in virtual currency for criminal actors, including an organization linked to the Democratic People’s Republic of Korea.

Tornado Cash Founders Charged

Roman Storm and Roman Semenov, co-founders of Tornado Cash, were charged by the Federal Bureau of Investigation (FBI) in August with conspiracy to commit money laundering, conspiracy to commit sanctions violations, and conspiracy to operate an unlicensed money-transmitting business.

Involvement of Lazarus Group

One of Tornado Cash’s clients mentioned in the indictment is the Lazarus Group, a North Korean cybercriminal organization that was sanctioned by the U.S. Department of the Treasury in 2019.

Tornado Cash and Money Laundering

Tornado Cash was a “cryptocurrency mixer” that facilitated more than $1 billion in money laundering transactions and laundered hundreds of millions of dollars for the Lazarus Group, according to the Justice Department.

How a Cryptocurrency Mixer Works

The FBI’s website provides an example to define how a cryptocurrency mixer operates. It compares it to a bank that’s open 24/7, where users can make deposits into a shared account and receive a code to withdraw the funds later. The transaction can be carried out anonymously, and the bank doesn’t track who deposited or withdrew the money.

Violation of Know Your Customer and Bank Secrecy Act Rules

Tornado Cash “ignored” Know Your Customer and Bank Secrecy Act rules, allowing criminal enterprises like the Lazarus Group to utilize the service without impediment, according to the FBI.

Arrest and Public Assistance

Roman Storm was arrested in August, but Roman Semenov remains at large. The public is asked to contact the FBI with any information about Semenov’s whereabouts or to report possible cybercrimes involving cryptocurrency.

Contact the FBI by calling 1-800-CALL-FBI (225-5324) or visiting tips.fbi.gov.