Current Standoff with Roman Storm
Developer Roman Storm Linked to Tornado Cash Facing Trial, According to DOJ Announcement
The U.S Department of Justice (DOJ) has declared its intention to prosecute Roman Storm, a co-creator of the Ethereum coin mixer, Tornado Cash. According to a department spokesperson, Storm is charged with conspiring to commit money laundering, sanctions evasion, and transporting ill-gotten funds [1][2][3]. The trial is scheduled to commence in less than two months at a Manhattan court [4].
However, the DOJ has decided to abandon a specific aspect of its conspiracy charge. An illegal money transmitting business is considered any entity that neglects to comply with U.S money transmitting business registration requirements as per federal law. This decision was influenced by Peter Van Valkenburgh, executive director of Coin Center, who pointed out a conflict between this part of the DOJ's conspiracy charge and FinCEN's 2019 guidance [5]. FinCen's guidance suggests that non-custodial entities, such as Tornado Cash, aren't covered under money transmitter laws.
"Those building neutral, noncustodial technologies should not be held to unreasonable criminal standards based on unfounded interpretations of the law,” says Amanda Tuminelli, executive director, and chief legal officer of DeFi Education Fund [5].
The DOJ's actions follow a policy memo released last month that emphasized a new strategy for tackling crypto-related crimes. In most cases, the DOJ will no longer pursue charges against mixing services, among other entities, like exchanges. Instead, they will focus on apprehending bad actors using these services to launder funds [6]. This move by the DOJ was hailed by the crypto industry as a sign of a more crypto-friendly regime under U.S President Donald Trump [6].
Privacy advocates, including Edward Snowden, have described services like Tornado Cash as tools for maintaining on-chain privacy [6]. Last year, a Dutch court handed Alexey Pertsev, another Tornado Cash developer, a 64-month prison sentence for money laundering charges [7]. However, he was released on electronic monitoring in February while preparing for an appeal [7].
In response to Decrypt's request for comment, the DOJ, Storm, and his legal team did not provide additional details on the case [8].
Sources:
- DOJ to proceed with charges against Tornado Cash co-founder Roman Storm
- Roman Storm: DOJ will pursue money laundering charges against Tornado Cash cofounder
- DOJ on Tornado Cash: Why It Dropped Part of its Money Transmission Case
- Federal Court Filing Reveals U.S. Government's Tornado Cash Evidence
- Tornado Cash Developers Appeal U.S. Money Transmission Business Charges
- DOJ Announces New Strategy for Tackling Crypto-Related Crimes
- Tornado Cash Developer Alexey Pertsev Released from Dutch Prison
- The Daily Debrief Newsletter
- The U.S Department of Justice (DOJ) plans to prosecute Roman Storm, a co-creator of the Ethereum coin mixer Tornado Cash, for conspiring to commit money laundering, sanctions evasion, and transporting ill-gotten funds.
- The DOJ's decision to abandon charging Storm with operating an illegal money transmitting business was influenced by Peter Van Valkenburgh, executive director of Coin Center, who cited FinCEN's 2019 guidance that non-custodial entities like Tornado Cash aren't covered under money transmitter laws.
- DeFi Education Fund's executive director, Amanda Tuminelli, comments that those building neutral, noncustodial technologies should not be held to unreasonable criminal standards.
- The DOJ's new strategy for tackling crypto-related crimes announced last month focuses on apprehending bad actors using mixing services, while dismissing charges against such services themselves.
- Privacy advocates like Edward Snowden consider services such as Tornado Cash to be essential tools for maintaining on-chain privacy.
- Alexey Pertsev, another Tornado Cash developer, was handed a 64-month prison sentence for money laundering charges last year but was recently released on electronic monitoring while preparing for an appeal.
- The general-news media outlet Decrypt had requested comment from the DOJ, Storm, and his legal team but received no additional details on the case.
