Tornado Cash Developer Moves to Dismiss Money Laundering Charges with Legal Motion

Roman Storm, the co-founder of Tornado Cash, has filed a motion seeking the dismissal of all three charges against him, contending that his actions did not constitute running a money laundering operation and did not violate the International Emergency Economic Powers Act.

In a submission to the United States (US) District Court for the Southern District of New York on 29 March, his legal representatives argued that he cannot be held responsible for conspiring to launder funds.

According to Roman's legal team, Tornado Cash was developed, became immutable, and was made publicly available before it was utilised by the hacking groups sanctioned by the US Department of Treasury.

They maintain that he had limited control over preventing a "sanctioned entity from using it" by the time the alleged misconduct occurred.

Alleged Connection: Tornado Cash and Lazarus Group Sanction Evasion

The charges against Roman centre on the allegation that Tornado Cash facilitated the North Korean Lazarus Group's efforts to evade US sanctions, potentially aiding the country's regime in financing its nuclear program.

"Storm is a developer, and his only agreement, together with the members of his US-based company, was to build software solutions to provide financial privacy to legitimate cryptocurrency users," Friday night's filing stated. "This is not a crime."

His lawyers further argued that Tornado Cash did not function as a money-transmitting business since it did not charge a fee for transmitting funds, and users retained complete control over their cryptocurrencies.

They assert that Roman's intention was to develop software solutions that provided financial privacy for law-abiding cryptocurrency users, labelling the charges as "fatally flawed and warranting dismissal."

In September 2023, Roman pleaded not guilty to all charges and was released on a $2 million bond shortly after his arrest, albeit with travel restrictions confining him to certain regions of New York, New Jersey, Washington, and California.

This development occurs amid the US government's continued crackdown on crypto-mixing services.

Roman Appealed for Aid Against Money Laundering Allegations

Roman had previously sought support from right-to-privacy advocates in preparation for his upcoming criminal trial, expressing confidence in his legal team's ability to mount a robust defense for his September 2024 trial.

“Whether you're [a] passionate developer like me involved with Web3 or just care about software and privacy, this legal battle will affect you. This case will set a major precedent for years to come," he said.

In response, the Arbitrum DAO submitted a proposal to allocate approximately $1.3 million worth of Arbitrum (ARB) tokens from the community wallet to assist him. However, the proposal has since been withdrawn without explanation.

A crowdfunding campaign on GoFundMe aimed at collecting legal fees for him and Alexey Pertsev was terminated on 16 February due to a breach of the platform's terms of service, which posed potential risks or liabilities to GoFundMe, its employees, or users.

Reportedly, the US Treasury has placed Tornado Cash on its Specially Designated Nationals list, effectively prohibiting Americans from using this mixer.

Why is Roman Storm's Case a Big Deal for the Crypto World?

The resolution of Roman Storm's case carries significant implications, not just for cryptocurrency mixers, but also for the broader landscape of software development accountability.

This pivotal verdict stands to define legal parameters surrounding user privacy rights in the cryptocurrency realm and could shape the trajectory of future privacy-centric technologies.