New York, New York-Tornado Cash Developer Roman Storm’s criminal laundering of money is intended to start in Manhattan on Monday morning when Storm’s lawyers and prosecutors will start choosing a jury to supervise Storm’s four-week trial.
Storm was arrested in Washington State in 2023 and accused of conspiracy to commit money laundering, conspiracy to violate US sanctions and conspiracy to run an unlicensed money that transmits business – prosecutors who, if storm are convicted, have a maximum total sentence of 45 years in prison. Storm’s colleague Tornado Cash developer, Russian National Roman Semenov, faces the same charges, but remains largely. Another developer, Alexey Pertsev, was convicted of money laundering in the Netherlands in 2024 and sentenced to five years in prison, which he is currently appealing.
In the heart of Storm’s case lies Tornado Cash, a privacy-oriented cryptocurrency blend service, as the government has claimed, was used to wash over $ 1 billion in criminal proceeds of bad actors-Inclusive Lazarus group, North Korea’s state sanction The sanctions of the sanctions and his colleagues turned a blind eye. Storm’s lawyers, meanwhile, have claimed that he was simply a developer of open source, decentralized software with legitimate, confidentiality -preserving uses that should not be held responsible for poor actors’ use of it.
“There will definitely be a very powerful defense here that they wrote code and that [Tornado Cash] was designed for privacy – as some people may have benefited from it but [Storm and his colleagues] were not co -conspirators, ”said Mark Bini, a partner in Reed Smith’s global legislative and enforcement group group.” Mixers have been very controversial because they have been used by many people doing bad things, no doubt about it, but the idea that some people will use them for privacy is also a legitimate argument. It will create a tough fight here. “
Storm’s lawsuit has drawn many in the crypto industry’s attention who have raised concern that if storm is found guilty, it could mean that developers down the line are on the hook of how people use their programs – something that can have devastating consequences for both the availability of privacy and the decentralized funding (Defi) space as a whole. A number of major players in the industry, including investment company paradigm, and non-profit advocacy groups Coin Center and Defi Education Fund, have presented Amicus-Briefs in Storm’s defense.
However, others have been more reluctant to accept Storm’s privacy defense. Economics -author JP Koenig wrote in a blog post from 2024 that if Storm prevails at the trial, it could “potentially mean that anyone who wants to facilitate illegal activities would have a strong incentive to copy Tornado cash, effectively transform their operation into a ‘golem’ – a bright artificial artificial artificial.
Swiss Blockchain Analytics company Global Ledger wrote in a blog post that there are generally “far more reasons why cyber criminals may want to use a mixing service than developers who legitimately want to obscure the movement of their personal foundations.”
Changing winds
Storm’s trial begins as the US government continues to review its approach to the crypto industry – especially crypto regulation. Under US President Donald Trump, the White House has taken a friendlier attitude towards the industry (which poured a total of $ 130 million in congress races in the 2024 election and at least $ 18 million in Trump’s opening committee alone), pushed regulators and law enforcement to do the same.
Since Trump joined in January, the US Securities and Exchange Commission-who had taken a bogeyman-like status under former President Gary Gensler for his so-called practice of “regulation of enforcement” an industry-friendly crypto-taskforce and dropped a number of open cases and investigations of cryptic businesses. In an April -Memo to the staff ordered Deputy Attorney Todd Blanche the US Ministry of Justice (Doj) The staff to “narrow down” their focus on cryptoberrid and instruct them that the agency would no longer charge violation of regulatory violations in cases involving crypto.
Although some speculated that prosecutors would return from their case against storms in the wake of Blanche’s memo, the government pushed forward and fell only part of a charge. Prosecutors also chose to continue with their case against storm in March after the US Ministry of Finance’s Office of Foreign Action Control (Ofac) Renuated Tornado Contacts from their list of sanctioned units after a federal judge gave up that the agency could not sanction a smart contract.
“Honestly, I was a little surprised that it was forward after we saw it [Tornado Cash] was taken from the OFAC list, ”Bini said.” We do not know the government’s evidence yet, but we have seen the Trump administration really move away from this kind of regulation type. And this seems like someone on the edges of it because the conspiracy to run an unlicensed money that transmits business [charge] Works as the type of legislative case that the administration might come out of business. “
Storm on trial
During a pre-court case conference last week, District Judge Katherine Polk Failla from the southern district of New York (Sdny) gave up that none of the pages could bring the OFAC sanctions up – either that Tornado cash was sanctioned in the first place or that the sanctions were subsequently removed – during Storm’s trial and argued that it would confuse the jury. Failla also gave up that none of the parties could mention the result of a related civilian case, van Loon vs. Department of the Treasury.
Bini told Coindesk that Failla’s decision to keep the OFAC sanctions out of the trial are likely to help the government’s case more than Storm’s.
If the defense was able to tell the jury that ofac’s sanctions were later dropped, Bini said, “I think you are more likely to get jury leader to say ‘gosh, I’m not sure if this is illegal or not.’ And if they are not sure, the defendant is not guilty.
Bini said that if the trial results in a conviction, Failla’s prevailing potential reasons for Storm’s lawyers present to appeal.
“The defense can say,” hello, we should have had the right to present it to the jury, we think it is important evidence, “he said.” This is the type of case where even if the government gets a conviction they usually do, there can really be some legal weaknesses. “
If the jury finds Storm guilty, Bini said there may be another option in addition to an appeal – a presidential pardon. Trump has been paving a number of people in the crypto industry since joining in January, including the co-founders of Bitmex and Silk Road founder Ross Ulbricht.
“Let’s say it results in a conviction, that doesn’t mean the president may not get involved afterwards,” Bini said. “It’s a bit of a wild card that we could see playing out here if the case results in a conviction.”
At a last conference before trial on Friday, Storm’s attorneys made a final ditch effort to get the case dismissed after the government revealed its theory of locality (Basic Prosecutor’s Reason to bring the case in the southern district of New York) Hanged on three evidence-storm texts for a New York-based venture capitalist, Storm’s interview with a New York-based Bloomberg reporter and the fact that a hacker gained access to Tornado Cash from New York.
Failla ultimately gave up against the Defense Movement, which allowed the government’s case against storm to proceed to trial.
The next four weeks
Storm’s lawsuit, originally planned for two weeks, is expected to run a full month due to the large number of witnesses in the case. The government alone told the court that it was planning to call more than 20 people to testify, including a hacker who used Tornado Cash, a so -called “victim” virtue and a number of expert vitner.
Selection of jury is expected to take two days of opening arguments that are probably scheduled for Wednesday.
Storm has not yet stated in any way whether he will testify in his own defense, but Bini said it could be a great help to his defense.
“I think there’s a really good chance [Storm] will testify. If so, [he’s] will have to resist a truly rigid cross [examination]But it could be really powerful in a case like this, “Bini said.” The burden is on the government, not [defense]But they may want to take the stand and tell the jury their story. “
