A federal indictment unsealed Wednesday in the Southern District Court of New York charges two co-founders of cryptocurrency giant Tornado Cash with operating a crypto scheme that laundered hundreds of millions of dollars for North Korean hackers. One is a Russian national and the other is a Washington state executive.

Roman Semenov, the Russian national, and Roman Storm were charged with laundering and violating sanctions through Tornado Cash, a crypto “mixer” that allegedly laundered more than $1 billion, including hundreds of millions for Lazarus Group, a North Korean cybercrime organization, according to the indictment.

By mixing up the origins of a transaction before it is transmitted to the recipient, cryptocurrency mixers help protect users’ privacy.

In a statement, US Attorney Damian Williams said Storm and Semenov hid the fruits of their crimes while publicly claiming to provide a technically sophisticated privacy service.

In a statement released by the US Attorney’s Office, Semenov remains at large and Storm has been arrested in Washington.

In coordination with the DOJ, the Treasury also personally sanctioned Semenov Wednesday. According to the Treasury Department, Tornado Cash’s third co-founder was arrested on money laundering charges in the Netherlands last year.

In a statement, Storm’s lawyer, Brian Klein, said, “We are incredibly disappointed that the prosecutors chose to charge Mr. Storm for helping develop software, and they did so based on a novel legal theory with dangerous implications.”

The “Mr.” has cooperated with prosecutors’ investigations since last year and denies engaging in criminal activity,” Klein said.

Tornado Cash is a well-known mixer, and it, along with much of the crypto industry, has been under increasing regulatory scrutiny. According to the US Treasury, crypto mixers are commonly used to launder stolen funds.

Despite complaints from customers, Tornado Cash’s founders failed to implement know your customer and anti-money laundering programs required by law, the DA alleged.

Tornado Cash was allegedly used by Lazarus Group, a North Korean organization, in violation of US sanctions in April and May 2022, the US attorney’s office said. The indictment charges Storm and Semenov with continuing to facilitate sanctions-violating transactions.

A conspiracy to commit money laundering and a conspiracy to violate the International Economic Emergency Powers Act are charged against each of them.