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Tornado Cash Co-founder Roman Storm Asks Court to Dismiss Money Laundering Charges

Last Updated April 1, 2024 12:18 PM
Shraddha Sharma
Last Updated April 1, 2024 12:18 PM
By Shraddha Sharma
Verified by Peter Henn

Key Takeaways

  • Tornado Cash co-founder Roman Storm has submitted a motion to the Southern District Court of New York.
  • He claims innocence in money laundering charges and charges that he violated the International Emergency Economic Powers Act.
  • Storm’s defense argues that the legal statutes under which he is charged are “unconstitutionally vague.”

Legal challenges increased for Tornado Cash co-founder Roman Storm, after the US sanction on the cryptocurrency mixing service. He has taken a stand against the US government by filing a motion to dismiss charges levied against him. Previously, GoFundMe shut down crowdfunding for Storm’s defense while the crypto community has been defending the founder.

Storm’s Motion to Dismiss

The motion filed  by Storm’s legal team argues the statutes used to charge him are “unconstitutionally vague.” Storm contends the laws do not clearly define the prohibited activities. This, therefore, makes it unreasonable to say that an individual would know whether or not their actions were illegal. The defense argues that writing and distributing software code to enhance privacy over financial transactions should not be deemed criminal.

The defense maintains Storm neither engaged in money laundering nor violated the International Emergency Economic Powers Act.

The motion also invokes the “rule of lenity,” a legal principle that resolves ambiguity in criminal statutes in favor of the defendant. Storm’s defense argues that the broad interpretation of the laws by prosecutors does not provide fair warning to individuals about what constitutes illegal behavior, thereby requiring the dismissal of the charges.

Other Legal Hurdles

Storm’s legal challenge occurs amid a clampdown on illegal platforms and activities by developers in the crypto space. The US Department of Justice (DOJ) charged Storm and co-founder Roman Semenov with sanctions violations in 2023. They have been implicated in facilitating the laundering of billions of dollars by entities, including the notorious North Korean hacking group, Lazarus.

Previously, GoFundMe terminated the fundraising campaign for the Tornado Cash legal defense, citing a violation of its terms of service.

Tornado Cash developer Alexey Pertsev faces prison in a separate litigation. Pertsev faces  a proposed 64-month prison sentence in the Netherlands for laundering $1.2 billion through the service.

However, according to a 2024 report by Chainalysis, advanced cybercriminal networks such as the Lazarus Group have evolved their use of mixing services. After Tornado Cash was sanctioned, the Lazarus Group shifted its preference to Sinbad, followed by YoMix to launder their illicit funds.

Meanwhile, analysts  tracked assets linked to Prisma Finance’s hack moving through wallets to Tornado Cash, highlighting its use in laundering $6.5 million. In another hack, OpenLeverage lost around $250,000 dollars, connected to Tornado Cash, emphasizing its continued role in crypto crimes.

Will Motion to Dismiss Hold Ground?

Roman Storm’s motion to dismiss challenges to clarify the boundaries of legality for technology developers. However, due to the sanctions on Tornado Cash for allegations of money laundering, the legal framework is complex. Meanwhile, Tornado Cash co-founder Storm’s claims innocence – and the outcome of his filing could be crucial for the crypto industry.

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