In a pivotal legal development, Tornado Cash co-founder Roman Storm will proceed to trial after a US court denied a motion to dismiss multiple charges brought against him by the US Department of Justice. This follows a year after the DOJ announced an indictment against Storm and fellow Tornado Cash developer Roman Semenov.
Tornado Cash Developer Unable to Persuade US Judge
US officials assert that Storm and Semenov are two of the three key individuals responsible for creating, promoting, and operating Tornado Cash, a digital platform linked to over $1 billion in money laundering activities for various criminals, including notorious groups like the Lazarus Group.For context, Tornado Cash is a widely used decentralized cryptocurrency protocol that anonymizes transactions by mixing various assets, and it has been previously utilized by hackers to launder illicit funds.
In response to the allegations, Roman Storm submitted a motion to dismiss, arguing that the charges infringe upon his First Amendment rights, among other points. During a conference call on September 26, US Judge Katherin Polk Failla of the Southern District of New York rejected Storm’s motion, indicating that the blockchain developer will face a comprehensive legal trial.
According to Amanda Tuminelli, Chief Legal Officer at DeFi Education Fund, Judge Failla clarifies that, contrary to arguments from the defendant’s legal team, having control over transactions on Tornado Cash is not necessary to operate a money-transmitting business under Section 1960 of the US Constitution. The judge likened Tornado Cash to other money-transmitting entities.
Moreover, Failla asserted that Storm’s defense, which posits that the creation of Tornado Cash is an expression of free speech through coding, is flawed, as the “functional capacity” of code as a form of speech is not recognized under the First Amendment. Ultimately, Katherin Failla emphasized that the issues raised by Storm’s legal representatives are factual matters that warrant a trial. The US Judge remarked:
To the extent Storm is asking me to resolve a disputed issue of fact, I am unable to do that.
Storm Scheduled for Trial in December
Following Judge Failla’s ruling, Roman Storm is slated for trial on December 2 in New York. Storm and Semenov each face one count of conspiracy to commit money laundering, operate an unregistered money-transmitting business, and violate the International Economic Emergency Powers Act. If convicted, each individual could face a combined sentence of up to 45 years in prison.
While Roman Storm is in the custody of the DOJ following his arrest in August 2023, Semenov remains at large and his whereabouts are currently unknown to authorities. In the meantime, Alexey Pertsev, the third co-founder of Tornado Cash, has been sentenced to five years in prison by Dutch authorities following his indictment in 2022.
Featured image from Bloomberg, chart from Tradingview
