Tornado Cash developer Roman Storm was arrested in August on three charges related to his role as co-founder of Ethereum's privacy protocol, Tornado Cash, and was cited by a prominent cryptocurrency advocacy group. Support has been received in the form of three court briefs.
Last week, Storm moved to have the charges against him dismissed, arguing that the government's characterization of various elements of Tornado Cash's services and blockchain technology is “fatally flawed.” Roman Semyonov, a Russian national and co-founder of Tornado Cash who was charged with the same charges, is still at large, while another co-founder, Alexei Pertsev, is currently awaiting the outcome of a trial in the Netherlands. is scheduled for May 14.
The three court briefs were filed by Coin Center, the Blockchain Association, and the DeFi Education Fund. Although written and filed separately, the briefs make broadly similar arguments against the government's characterization of the case in the indictment.
For example, the government's indictment alleges that Mr. Seminov and Mr. Storm were “engaged in the business of transferring funds on behalf of citizens,” but Tornado Cash was not registered with the U.S. Financial Crimes Enforcement Network (FinCEN). , alleging that this led to conspiracy charges. Operating a remittance business without a license.
However, the Blockchain Association points out in its brief that this characterization is contrary to FinCEN's own definition. “Remittance providers cannot be held liable unless the intermediary has complete independent control over the assets,” the brief says. “In fact, FinCEN’s own guidance recognizes that ‘…suppliers of anonymization software’ are not money transmitters.”
The briefing details how Tornado Cash will work without giving developers independent control over user assets, and maintains the government's position that Tornado Cash is a money transfer business. In this case, “…compliance with the law” is threatened. Bank secrecy laws may be impossible for developers, meaning the government's interpretation is tantamount to banning anonymization protocols. ”
Coin Center's brief focuses on rebuttals to the charge of conspiracy to violate the International Economic Emergency Powers Act (IEEPA) and provides a First Amendment defense to the charge. The conspiracy count related to Tornado Cash's alleged sanctions violations “should not stand because the publication of decisions about the functionality of the software and how it was released occurred long before any information about the incident was known.” [North Korean state-sponsored hackers] “There was even a possibility that Lazarus Group activities existed,” the brief states.
Alleging that Tornado's founders colluded with Lazarus means that “developers of the Linux open source operating system freely released valuable computing tools that Iran later used to operate weapons-related computers. This is like suggesting that simply by doing so, they have colluded with the Iranian regime. program,” the summary continues.
In rebutting the charges, DeFi Education Fund's brief also offers a dire outlook for how the legal world will change if Storm loses. “If these theories of liability are tested in court, they could prosecute software developers who create code that is later used by third parties for malicious purposes simply because the developer later became aware of its use.” The government will be given unlimited powers to do so,” the brief reads. “Without a restrictive principle in place, nearly every developer who creates open source software will be exposed to criminal liability for uncontrolled activities years or decades later.”
Government prosecutors have not yet responded to a motion to dismiss the charges against Storm.
Disclaimer: The Block is an independent media outlet that delivers news, research and data. As of November 2023, Foresight Ventures is a majority investor in The Block. Foresight Ventures invests in other companies in the cryptocurrency space. Cryptocurrency exchange Bitget is an anchor LP of Foresight Ventures. The Block continues to operate independently to provide objective, impactful, and timely information about the cryptocurrency industry. Current financial disclosure information is as follows:
© 2023 The Block. All rights reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
