Important Points
- Roman Storm could face a maximum of 45 years in prison if found guilty on all counts.
- Tornado Cash is accused of laundering more than $1 billion, including proceeds linked to North Korea.
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A federal judge in the United States has rejected Tornado Cash developer Roman Storm’s request to dismiss money laundering and sanctions evasion allegations, leading to a trial set to commence on December 2 in New York.
Judge Katherine Failla from the Southern District of New York dismissed Storm’s assertion that the creation and deployment of the Tornado Cash protocol was protected under free speech rights. The judge indicated doubts regarding this claim, emphasizing that while coding can be considered expressive activity, using code to direct computer functions is not classified as protected speech.
Tornado Cash operates as a mixer protocol on Ethereum, designed to obscure transaction pathways. Despite its popularity among users focused on privacy, authorities maintain that it has served as a conduit for cybercriminals, including hackers from North Korea, to launder illicitly obtained tokens. Storm faces charges related to conspiracy to commit money laundering, operating an unlicensed money transmission activity, and evading US sanctions. Prominent supporters of the protocols include Vitalik Buterin, who advocated for a compliant iteration, and Edward Snowden, who contended that privacy should not be criminalized while urging contributions to Tornado Cash’s legal defense.
The judge also dismissed additional arguments from Storm regarding case dismissal, including the assertion that Tornado Cash is an “immutable” protocol beyond his control. Judge Failla clarified that control is not a requisite condition for the operation of a money transmission business. She added that Tornado Cash did not differ significantly from other crypto mixers previously acknowledged as money transmitting businesses in legal proceedings.
“Control is not a necessary requirement,” Failla remarked, suggesting that even if control were pertinent, this situation was “not significantly different,” particularly compared to crypto mixers that have been identified as money transmitting businesses in prior court rulings.
Legal experts from the industry expressed their dissatisfaction with the ruling. Amanda Tuminelli, the chief legal officer at the DeFi Education Fund, commented that they had anticipated the judge would reject the government’s “novel theory of developer liability.” Jake Chervinsky, legal head at crypto venture capital firm Variant, labeled the decision as “an assault on the freedom of software developers everywhere.”
In April, the Department of Justice argued in a detailed 111-page filing that Tornado Cash functioned as a commercial entity. Shortly thereafter, Senators Ron Wyden and Cynthia Lummis expressed their opposition to what they considered an unprecedented legal interpretation concerning the Tornado Cash and Samourai Wallet cases.
