Tornado Cash Creator Roman Storm Seeks Dismissal of Charges Contesting Crypto-Laundering Role

News | June 4, 2024 By:

On Friday, May 24, 2024, the legal team of Tornado Cash developer Roman Storm filed a motion to dismiss the money laundering, unlicensed money transmitting business, and sanctions evasion charges against their client in the US District Court for the Southern District of New York.

Storm was indicted in 2023 for his alleged role in developing the Tornado Cash cryptocurrency mixing protocol, which prosecutors say was used to launder billions of dollars worth of cryptocurrency from major hacks and to evade sanctions on North Korea.

In the motion, Storm’s attorneys argue that the charges should be dismissed because Tornado Cash does not meet the legal definitions of a money-transmitting business or involvement in a financial transaction, as required by the statutes. They say Tornado Cash is simply open-source software, like any other software, and its creators cannot be held criminally liable for how third parties subsequently used the tool.

Specifically, the motion states that Tornado Cash does not exercise control over any funds on the blockchain, which the attorneys argue is a necessary element for classification as a money transmitter under federal law. They note the government concedes Storm lost control over Tornado Cash after it became an immutable and publicly available protocol in May 2020.

Additionally, neither Storm nor the Tornado Cash developers charged any fees for transactions using the protocol. Taking fees from customers is another requirement under the definitions. The motion also argues Tornado Cash is not a business and is instead neutral software analogous to communication technologies like USB cables.

On the money laundering charge, the motion claims the indictment fails to allege Storm or any alleged co-conspirators personally conducted financial transactions, as required by statute, or that there was any agreement between Storm and the actual perpetrators of alleged criminal acts. It states the government acknowledges Storm did not engage in unlawful transactions or have such an agreement.

Regarding the sanctions evasion charge, the motion argues OFAC’s expansion of regulations to cover “data transmission” software overrides longstanding constitutional protections for informational materials. It also says the indictment provides no evidence Storm willfully conspired to help North Korea evade sanctions years after developing the initial Tornado Cash software.

If the court denies the motion to dismiss, Storm’s attorneys say, the case should still be thrown out on several constitutional grounds. They argue the relevant statutes are vague, overbroad, and reliance on novel interpretations to prosecute Storm would violate due process. The motion calls the government’s theories “dislike of non-public transfers of cryptocurrency” rather than valid legal arguments.

Please contact BlockTribune for access to a copy of this filing.