Tornado Cash Co-Founder Roman Storm to Face Trial After U.S. Judge’s Decision

A United States federal judge has denied a motion to dismiss charges against Tornado Cash co-founder Roman Storm, clearing the path for him to stand trial on money laundering allegations.

Tornado Cash is a crypto mixer designed to obscure the flow of funds to enhance transaction privacy. Its privacy feature has made it a vital tool for malicious actors like the North Korean hacking group Lazarus. Others utilize the privacy protocol for laundering activities.

The U.S. Judge’s Decision

According to Amanda Tuminelli, chief legal officer of the DeFi Education Fund, during a teleconference on September 26, Judge Katherine Polk Failla of the Southern District of New York ruled against Storm’s request to drop the three charges levied by the U.S. Department of Justice (DOJ).

In the US v. Storm (Tornado Cash) hearing just now, the court rejected the arguments in Storm's motion to dismiss as a matter of law and heavily punted what she said were factual issues for trial ("To the extent Storm is asking me to decide a controverted issue of fact, I am not… https://t.co/enpBby3Gue

— Amanda Tuminelli (@amandatums) September 26, 2024

Storm’s legal team argued that their client’s role in developing the Tornado Cash software was protected under the First Amendment, which safeguards freedom of expression.

However, Judge Failla rejected the defense, stating that the “functional capability” of software code does not qualify as speech under the First Amendment. She emphasized that the government’s efforts to combat money laundering and sanction evasion are separate from free speech issues.

Judge Failla remarked that Tornado Cash’s operations were not significantly different from other financial institutions or money-transmitting services subject to regulation.

Criticism of the Ruling

The U.S. judge’s ruling drew criticism from Jake Chervinsky, Chief Legal Officer at Variant Fund, who described the decision as a “perversion of law” and a threat to software developers’ freedom. He warned that the case sets a troubling precedent for the broader tech community.

The indictment, initially filed in August 2023, accused Storm of aiding the crypto mixer in laundering over $1 billion in illicit funds.

Storm and fellow co-founder Roman Semenov were both charged with conspiracy to commit money laundering, conspiracy to violate the International Emergency Economic Powers Act (IEEPA), and conspiracy to operate an unlicensed money-transmitting business.

Roman Storm’s trial is scheduled to begin on December 2 and is expected to last for two weeks. His partner, Semenov, a Russian national, remains a fugitive.

In a related development, Tornado Cash developer Alexey Pertsev was sentenced to 64 months (five years and four months) in prison after a Dutch court found him guilty of money laundering in connection with Tornado Cash, as previously reported by CoinTab.