Tornado Cash Co-Founder Faces Trial after Judge Denies Motion to Dismiss Charges

The judge ruled that coding, while expressive, is not protected as free speech when used to direct computers to perform illegal actions.

Key Notes

Roman Storm's motion to dismiss charges tied to Tornado Cash was denied by a US federal judge.Storm faces charges of money laundering, sanctions evasion, and running an unlicensed money transmission business.Storm's trial is set to start on December 2 in New York.

Roman Storm, the co-founder of Tornado Cash, is set to face trial after a US federal judge denied his request to dismiss charges related to his involvement in the crypto-mixing platform.

Storm was arrested in Auburn, Washington, and later released on a $2 million bond. He faces serious federal charges, including committing money laundering, evading US sanctions, and operating an unregistered money-transmitting company.

Storm’s defense aims to dismiss the charges based on the premise that he was merely a coder with no direct involvement in how the platform was later used. His legal team has argued that Tornado Cash is self-executing software that he no longer had control over once it was deployed on the Ethereum blockchain in 2019. However, the judge has ruled that the charges against Storm will proceed.

The Ruling

In a telephone conference held on Thursday, US District Judge Katherine Polk Failla stated that “control is not a necessary requirement” to prove guilt.

“While computer coding can be expressive and protected,” the judge noted, “when that code is used to direct a computer to perform functions, it is not shielded as protected speech.”

The judge expressed doubt over Storm’s claim that his creation and deployment of Tornado Cash were protected under the First Amendment as free speech.

Moreover, the ruling dismissed the argument that Tornado Cash was merely a neutral tool. She compared several cases where crypto-mixing platforms have been recognized as unregistered money-transmitting businesses.

The ruling further noted that Tornado Cash’s operations were not entirely altruistic, pointing to evidence that the platform’s co-founders had cashed out millions of dollars from TORN holdings.

Crypto Community Reacts

The crypto community is strongly criticizing the recent ruling. DeFi Education Fund’s legal head, Amanda Tuminelli, argued that developers should not be held liable for the illicit activities of third parties who use open-source software. She stated that the real responsibility lies with the individuals who misuse such tools for illegal purposes.

Jake Chervinsky, a prominent attorney in the crypto space, also criticized the ruling, calling it “an assault on the freedom of software developers”.

As the trial date approaches, the case is shaping up to be a critical moment for the legal treatment of open-source developers in the cryptocurrency industry. Storm’s trial is set to begin on December 2 in New York.

Tornado Cash, designed to enhance privacy in cryptocurrency transactions, has recently become controversial for its alleged use by hackers linked to North Korea’s Lazarus Group. The platform was sanctioned by the US Treasury Department in August 2022. By January 2023, Tornado faced a 68% loss in total inflow.

Interestingly, the US Department of Justice has previously accused Tornado Cash of securing nearly $1 million in funding from a venture capital firm, allegedly with the expectation of sharing profits.

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