- Roman Storm, co-founder of Tornado Cash, has been ordered to stand trial on money laundering charges
- U.S. prosecutors allege that Tornado Cash helped launder over $1 billion in illicit funds, including transactions tied to North Korean cybercriminals
- The judge rejected Storm’s motion to dismiss, stating that the platform was not a neutral tool but knowingly enabled illegal activity
Roman Storm, co-founder of the crypto mixing service Tornado Cash, will face trial after a U.S. District Court judge denied his request to dismiss the charges against him. Storm, along with fellow co-founder Roman Semenov, is accused of operating Tornado Cash as a money laundering service that facilitated over $1 billion in illegal transactions. Prosecutors allege that the platform helped the North Korean hacking group Lazarus Group evade U.S. sanctions through these transactions, and Storm’s argument that the case was just about the writing of code has been dismissed by the judge.
Court “Cannot Accept” Storm’s Argument
Storm was indicted in August 2023 along with other Tornado Cash developers Roman Semenov and Alexey Pertsev, with the charges encompassing conspiracy to commit money laundering, sanctions violations, and operating an unlicensed money-transmitting business. Storm pleaded not guilty at a New York District Court the month after his arrest and was released on a $2 million bond with his passport seized.
In April, his legal team argued that the indictment was “fatally flawed” and violates First Amendment rights, contending that writing code, such as that used in Tornado Cash, constitutes protected speech, as was initially seen in the Daniel Bernstein case. However, in her ruling on the motion, Judge Katherine Polk Failla noted, “At this stage in the case, this court cannot simply accept Mr. Storm’s narrative that he is being prosecuted merely for writing code.”
She also stated that Storm’s actions went beyond just creating software, noting the significant evidence that Tornado Cash was knowingly used for money laundering activities, and that Tornado Cash had received nearly $1 million from venture capital with an understanding it would share profits.
Storm Benefited From Operation
Storm’s defense argued that Tornado Cash was an open-source tool designed to protect financial privacy. However, prosecutors highlighted that Storm and his co-founders allegedly “reaped millions of dollars in profits” while being aware of the platform’s use for laundering criminal proceeds. Judge Faila acknowledged this, saying, “The platform was not an altruistic venture.”
Judge Faila summarized that the jury would have to decide on crucial matters, not her:
I am required to accept, at this stage, the allegations of the indictment. I don’t get to make a determination of Mr. Storm’s intent at this stage. The decision regarding the sufficiency of the evidence of that intent is for the jury and not for me.
The Tornado Cash affair has become a cause célèbre for privacy advocates, who are firmly in the belief that Tornado Cash was a privacy tool whose usage by criminals was a facet of its design but not its core purpose.
