Tornado Cash dev’s bid to dismiss charges falls out, NY judge sets trial on December

Mila September 27, 2024

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Key Takeaways

Roman Storm faces up to 45 years if convicted on all charges.
Tornado Cash allegedly laundered over $1 billion, including funds from North Korea.

A US federal judge has denied Tornado Cash developer Roman Storm’s attempt to dismiss money laundering and sanctions evasion charges, paving the way for a trial to begin on December 2 in New York.

Judge Katherine Failla of the Southern District of New York rejected Storm’s argument that creating and deploying the Tornado Cash protocol was protected speech under the First Amendment. The judge expressed skepticism about this claim, stating that while computer coding can be expressive conduct, using code to direct a computer to perform functions is not protected speech.

Tornado Cash is a crypto mixer protocol on Ethereum that obscures transaction flows. While popular among privacy-conscious users, prosecutors allege it became a tool for cybercriminals, including North Korean hackers, to launder stolen tokens. Storm faces charges of conspiracy to commit money laundering, operate an unlicensed money transmitting business, and evade US sanctions. Supporters of these two protocols include Vitalik Buterin, who advocated creating a compliant version, and Edward Snowden , who argued that privacy is not a crime as he asked for donations to Tornado Cash’ legal defense.

The judge dismissed Storm’s other arguments for case dismissal, including the claim that Tornado Cash was an “immutable” protocol he could not control. Judge Failla stated that control is not a necessary requirement for operating a money transmitting business. She also noted that Tornado Cash was “not meaningfully different” from other crypto mixers previously recognized as money transmitting businesses in court cases.

“Control is not a necessary requirement,” Failla said, adding that even if control was relevant, this was “not meaningfully different,” especially among crypto mixers recognized as money transmitting businesses, citing earlier court cases.

Industry attorneys expressed disappointment with the ruling. Amanda Tuminelli, chief legal officer at the DeFi Education Fund, said they had hoped the judge would reject the government’s “novel theory of developer liability.” Jake Chervinsky, chief legal officer at crypto venture fund Variant, called the decision “an assault on the freedom of software developers everywhere.”

In April, the DOJ argued from a 111-page court filing that Tornado Cash operated as a commercial enterprise. A month later, Senators Ron Wyden and Cynthia Lummis argued against what they deemed to be unprecedented interpretation over the Tornado Cash and Samourai Wallet cases.