The Department of Justice to Press Forward with Charges Against Tornado Cash Co-Founder Roman Storm
The Department of Justice announced on Thursday that it would continue with charges against Roman Storm, the co-founder of the Ethereum coin mixer Tornado Cash. The DOJ spokesperson stated that Storm is facing charges of willfully conspiring to commit money laundering, sanctions evasion, and transporting and transmitting funds that he knew were criminally derived.
Federal Prosecutors to Argue Conspiracy Charges
According to a court filing, federal prosecutors will argue that Storm engaged in a conspiracy to commit money laundering, operate an unlicensed money transmitter business, and evade U.S. sanctions. The trial is set to take place in a Manhattan courtroom in less than two months.
However, the DOJ has decided to drop one aspect of its conspiracy charge related to operating an unlicensed money transmitter business. This decision was influenced by guidance issued by the Financial Crimes Enforcement Network (FinCEN) in 2019, which stated that non-custodial entities like Tornado Cash are not considered money transmitters.
Industry and Privacy Advocates React
Industry advocates welcomed the DOJ’s decision to no longer pursue charges against mixing services, viewing it as a positive shift towards a more crypto-friendly approach. Privacy advocates, including Edward Snowden, see services like Tornado Cash as tools for maintaining on-chain privacy.
Legal Battles and Sanctions
Storm’s case was set for trial after his motion to dismiss the charges was rejected by U.S. District Judge Katherine Polk Failla. The U.S. Treasury removed Tornado Cash from its sanctions list in March, following a court ruling that the agency had overstepped its authority in sanctioning the platform.
Despite a Dutch court sentencing another Tornado Cash developer to prison for money laundering, he was released in February to pursue an appeal under electronic monitoring. The DOJ, Storm, and his attorneys have not commented on the ongoing legal proceedings.
Overall, the case against Storm highlights the complex legal landscape surrounding cryptocurrency and the challenges of regulating innovative technologies like Tornado Cash.
Edited by James Rubin