A recent ruling by a federal judge at the United States District Court for the Southern District of New York has stirred controversy in the crypto community. The judge has blocked any mention of a crucial court victory for crypto privacy advocates in the upcoming criminal trial of Roman Storm, the developer of Ethereum coin mixer Tornado Cash. This decision has dealt a blow to the defense team’s strategy.
During a hearing on Tuesday, District Judge Katherine Polk Failla made it clear that the words “Van Loon” would not be allowed to be brought up during the trial. This ruling refers to the Van Loon vs. Department of the Treasury case, where the Fifth Circuit Court determined that “immutable smart contracts are not property because they are not capable of being owned.”
The significance of the Van Loon ruling lies in its finding that the Treasury’s Office of Foreign Assets Control exceeded its authority when it sanctioned the coin mixer. However, Judge Failla expressed concerns that discussing this case could confuse the jury and potentially derail the trial proceedings.
The trial of Roman Storm, scheduled to begin on July 14, has sparked debates within the crypto industry about whether software developers can be held criminally responsible for the use of their code. This case has become a focal point for examining the intersection of technology, legality, and individual accountability.
Dhrupad Das, a Web3 lawyer and founding partner at Panda Law, shed light on Judge Failla’s decision to exclude references to the Van Loon ruling. He explained that the judgment’s relevance to civil interpretations of OFAC’s authority under IEEPA, as opposed to criminal liability, was a key factor in the judge’s ruling.
Tornado Cash, founded in 2019 by Alexsey Pertsev and Roman Storm, is a non-custodial coin mixer that operates on the Ethereum network. The platform allows users to obfuscate the origin and destination of their transactions, making it a target for both privacy proponents and regulatory bodies.
Storm’s legal troubles began in 2022 when the OFAC sanctioned Tornado Cash for alleged involvement in money laundering activities, including transactions linked to North Korea’s Lazarus Group. The subsequent indictment of Storm by the DOJ on charges of money laundering conspiracy and operating an unlicensed money-transmitting business has brought the case to its current juncture.
With the dismissal of the final civil challenge to OFAC sanctions, Storm’s defense strategy has been significantly impacted. The focus now shifts to whether the jury will view Storm’s post-sanctions actions as criminal, potentially leading to a lengthy prison sentence if he is convicted.
As the trial unfolds, the crypto community watches closely to see how this case will shape the legal landscape for software developers and the broader implications for privacy and regulatory compliance in the digital asset space.