Key Takeaways
- Storm’s lawyers argued that Tornado Cash was not a money-transmitting business as it did not charge a fee for transmitting funds
- Storm is one among the 3 Tornado Cash cofounders who were indicted by federal prosecutors in the Southern District of New York in August 2023
Roman Storm, co-founder of cryptocurrency mixer Tornado Cash, has moved to dismiss charges against him, alleging he operated a money laundering business and violated the International Emergency Economic Powers Act.
In a filing to the United States District Court for the Southern District of New York on March 29, Storm’s lawyers argued against claims that he conspired to launder funds.
Storm and co-developer Roman Semenov faced charges in August 2023 for allegedly conspiring to commit money laundering, operating an unlicensed money transmitter, and violating the International Emergency Economic Powers Act. Storm was arrested and released on bail.
The U.S. Department of Justice accused Tornado Cash of facilitating over $1 billion in money laundering activities, including by groups like North Korea’s Lazarus. The platform has faced multiple sanctions from the U.S. Treasury Department.
Storm’s defense contended that Tornado Cash was publicly available before being used by sanctioned groups. They argued that writing code is a form of free speech, challenging the indictment’s basis.
Storm’s legal team also disputed claims in the indictment, rejecting the characterization of Tornado Cash as a “money transmitting business.” They emphasized that users retained control over their funds and did not pay fees directly to Tornado Cash.
Furthermore, they highlighted that Storm relinquished control over Tornado’s smart contracts before any alleged criminal activity occurred. They argued that Storm had no involvement with bad actors using the platform for illicit purposes.
The charges stem from allegations that Tornado Cash facilitated North Korea’s Lazarus Group in bypassing U.S. sanctions, purportedly funding its nuclear program.
Storm’s defense maintained that Tornado Cash did not operate as a money-transmitting business, as it did not charge fees for transmitting funds, and users maintained control over their crypto assets.
The defense concluded by asserting Storm’s intent to provide financial privacy solutions for law-abiding crypto users. They called the charges “fatally flawed” and requested their dismissal.
Storm previously pleaded guilty to related federal charges in September 2023 and was released on bail. Tornado Cash was banned by the U.S. Treasury in November 2022 due to its use by North Korea’s Lazarus Group in laundering hacking proceeds.
