Tornado Cash Co-founder Seeks Dismissal of Money Laundering Charges

Apr. 1, 2024
Tornado Cash Co-founder Seeks Dismissal of Money Laundering Charges

Roman Storm, co-founder of cryptocurrency mixer Tornado Cash, has significantly advanced his case by filing a motion to dismiss all three charges against him. He faces charges of operating a money laundering business and violating the International Emergency Economic Powers Act.

On March 29th, Storm’s lawyers argued against allegations that he conspired to launder funds in a filing to the United States District Court for the Southern District of New York.

Authorities arrested Storm and later released him on bail on charges of conspiring to commit money laundering, operating as an unlicensed money transmitter, and violating the International Emergency Economic Powers Act, which they had leveled against him along with Roman Semenov, co-developers.

Moreover, the U.S. Department of Justice implicated Tornado Cash in over one billion dollars worth of money laundering, including for groups like Lazarus, which is North Korea’s affiliate. Tornado Cash has received numerous sanctions from the U.S. Treasury Department. This platform has been sanctioned several times by the U.S. Treasury Department.

Storm’s defense argued that the organizations under sanctions started using Tornado Cash after it went public. The indictment’s foundation was challenged by arguing that coding is a form of free speech.

Storm’s Defense Challenges Tornado Cash Indictment

Storm’s legal team also disputed claims in the indictment, rejecting the description of Tornado Cash as a “money transmitting business.” They stressed that users had control over their monies and didn’t pay directly to Tornado Cash.

Furthermore, they pointed out that this occurred before any alleged criminal activity occurred as Storm surrendered control over Tornado’s smart contracts. They submitted that Storm did not engage with bad actors who used the platform for illicit activities.

The charges are the result of accusations that Tornado Cash abetted North Korea’s Lazarus Group in evading U.S. sanctions for allegedly financing its nuclear program. Also, Storm’s counsel argued that Tornado Cash was not operating as a money transmitter business because it did not charge fees to send money. People have control over their cryptocurrencies.

The defense concluded by asserting Storm’s intent to provide financial privacy solutions for law-abiding crypto users. They called the charges “fatally flawed” and requested their dismissal.

Storm previously pleaded guilty to related federal charges in September 2023, and authorities released him on bail. The U.S. Treasury banned Tornado Cash in November 2022 due to its use by North Korea’s Lazarus Group in laundering hacking proceeds.

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Rida Fatima

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An ardent wordsmith with a rich five-year background in delving into the realms of finance and cryptocurrencies. Alongside curating captivating blogs, Unique's talents extend to crafting imaginative and engaging content.