Tornado Cash co-founder requests dismissal of money laundering charges

Roman Storm, co-founder of cryptocurrency mixer Tornado Cash, has filed a motion to dismiss all three charges against him that allege he operated a money laundering business and violated the International Emergency Economic Powers Act.

“By no stretch can Mr. Storm be deemed to have conspired to launder funds,” Storm’s lawyers stated in a March 29 filing in the United States District Court for the Southern District of New York.

Storm’s lawyers argued that Tornado Cash was developed, “became immutable” and publicly available before it was used by the hacking groups sanctioned by the U.S. Department of the Treasury.

Therefore, by the time of the alleged misconduct, there was allegedly little that Storm could do to prevent a “sanctioned entity from using it.”

The charges are centered around Tornado Cash allegedly facilitating the efforts of the North Korean Lazarus Group bypassing U.S. sanctions, allowing the country’s regime to reportedly fund its nuclear program.

Court filing in the U.S. District Court for the Southern District of New York. Source: CourtListener

Furthermore, the lawyers contended that Tornado Cash was not a money-transmitting business as it did not charge a fee for transmitting funds, and users retained sole control over their crypto.

Arguing that Storm intended to build software solutions to provide financial privacy for law-abiding crypto users, they declared that the charges are “fatally flawed and should be dismissed.”

In September 2023, Cointelegraph reported that Storm pleaded not guilty to all charges and was released on a $2 million bond shortly after his arrest. He is largely restricted from traveling outside some areas of New York, New Jersey, Washington and California.

Related: Hacker moves $10M from 2023 phishing incident to Tornado Cash

This comes as the U.S. government continues its crackdown on crypto-mixing services.

On March 12, Cointelegraph reported that the founder of Bitcoin Fog, a $400 million crypto-mixing service, was convicted of money laundering.

Roman Sterlingov was found guilty of money laundering, money laundering conspiracy, operating an unlicensed money-transmitting business and violations of the D.C. Money Transmitters Act.

However, the crypto community sees significant value in crypto mixers, as they can provide increased privacy and confidentiality for legitimate reasons for those wanting to make anonymous business transactions.

At one stage, the Arbitrum DAO had considered allocating around $1.3 million worth of ARB tokens to support Storm’s legal expenses, but the proposal was scrapped for reasons that remain unclear.

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