Tornado Cash Creator Roman Storm Seeks Dismissal of Charges Relating to Cryptocurrency Privacy Protocol

On Friday, March 29, 2024, Roman Storm filed a motion to dismiss his indictment in federal court. Storm is accused of operating an unlicensed money-transmitting business and conspiracy related to Tornado Cash, an open-source cryptocurrency privacy protocol.

In his motion, Storm argues that none of the charges against him are legally sound. Storm helped create Tornado Cash smart contracts through his company Peppersec in order to provide privacy and anonymity for users of Ethereum, the second largest cryptocurrency by market value after Bitcoin. The Tornado Cash protocol allows users to swap their Ether, the cryptocurrency token that powers the Ethereum blockchain network, between addresses without those transactions being traceable on the public ledger.

Storm asserts that Tornado Cash is not a money-transmitting business under federal law because it does not have control over any funds or charge users any fees. The filing also disputes that Tornado Cash qualifies as a “financial institution” for the purposes of money laundering statutes. Furthermore, the motion claims the indictment fails to establish Storm knew of or agreed to any illegal purposes the protocol may have been used for after its release.

The filing argues Tornado Cash users maintain full ownership of their funds at all times without needing to trust a centralized third party. It adds that by May 2020 the smart contracts became immutable, so neither Storm nor anyone else could modify or disable them after that point. The defense also maintains the charges violate Storm’s free speech rights by criminalizing his work to develop open-source software code.

In addition, the motion asserts the conspiracy to violate sanctions charge under the International Emergency Economic Powers Act fails because the development and distribution of software is exempt as informational materials under the law. It further argues the indictment lacks allegations Storm specifically intended to help evade sanctions on North Korea.

Storm’s legal team is asking the court to dismiss all charges, contending they are legally invalid and construing the statutes in the way done by prosecutors would make them unconstitutionally vague and a violation of due process. The case will likely see further proceedings as the court considers the motion to dismiss.

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