Tornado Cash Co-Founder Seeks Dismissal of Money Laundering Allegations

Janet F. Sanchez -

Roman Storm's Legal Team Claims Charges Are Baseless

Roman Storm, the co-founder of the cryptocurrency mixing service Tornado Cash, has formally requested the dismissal of all charges against him, relating to accusations of operating a money laundering scheme and breaching the International Emergency Economic Powers Act. His legal representatives argue that the charges are fundamentally flawed, given that Storm had no control over preventing sanctioned entities from utilizing the crypto mixer.

The Defense's Argument: No Conspiracy to Launder Funds

Storm's legal team presented their case in a filing on March 29 to the United States District Court for the Southern District of New York, stating that it is unreasonable to consider Storm as having conspired to launder funds. They highlighted that Tornado Cash was already immutable and accessible to the public before it was used by the hacking groups that were sanctioned by the U.S. Department of Treasury. Consequently, they argue that Storm was powerless to prevent any misuse by sanctioned entities at the time of the alleged misconduct.

Court filing in the United States District Court for the Southern District of New York. Source: Court Listener

Charges Centered on North Korean Sanctions Evasion

The allegations against Tornado Cash primarily involve its purported role in aiding the North Korean Lazarus Group in evading U.S. sanctions, thereby allegedly supporting the country's nuclear program. However, Storm's lawyers maintain that Tornado Cash was not a money-transmitting business, as it did not charge fees for fund transfers and users maintained complete control over their cryptocurrency.

The case unfolds amidst a broader U.S. government crackdown on crypto-mixing services. Recently, the founder of Bitcoin Fog, another crypto-mixing service, was convicted of money laundering involving over $400 million. Despite legal challenges, many in the crypto community continue to see value in mixers for their potential to enhance privacy and confidentiality in legitimate transactions.

Uncertain Support from the Arbitrum DAO

In a related development, the Arbitrum DAO had contemplated allocating approximately $1.3 million in ARB tokens to support Storm's legal defense. However, this proposal has since been withdrawn, with the reasons for its removal remaining undisclosed.

Conclusion

As the legal battle continues, the cryptocurrency community watches closely, recognizing the potential implications of this case for the future of privacy and regulation in the digital asset space.