Roman Storm is making headlines as he fights to have all criminal charges against him thrown out.
His plea comes on the heels of a recent ruling from the Fifth Circuit Appeals Court, which declared that the sanctions imposed on Tornado Cash’s smart contracts by the Treasury’s Office of Foreign Assets Control, or OFAC were unlawful.
The government breaking the law?
Storm filed a motion in a Manhattan district court, arguing that the appeals court’s decision reveals serious flaws in the legal basis for his charges, and his legal team claims that this ruling highlights how all three counts in the indictment are fundamentally flawed.
One of the main sticking points is the charge of conspiring to violate the International Emergency Economic Powers Act, a central part of U.S. sanctions enforcement.
The appeals court found that Tornado Cash’s smart contracts are immutable, meaning they can’t be changed or controlled by anyone.
In fact, they stated that these contracts aren’t even considered property under the IEEPA, so they can’t be sanctioned.
“Mr. Storm could no more choose to stop them than he could choose to stop the sun from rising.”
The legal battle isn’t over
Storm argues that this ruling should also lead to dropping charges related to running an unlicensed money-transmitting business and conspiracy to commit money laundering.
He insists that Tornado Cash isn’t a financial institution and points out that its protocol became immutable back in May 2020, four months before any alleged conspiracy took place.
So, he argues there was never any agreement to launder money using their platform.
This whole legal case started in September 2022 when six Tornado Cash users, with support from Coinbase, took on the U.S. Treasury and OFAC, and while they initially lost, the tide turned in November 2023 with a huge victory for Tornado Cash supporters.
The DOJ gets involved
In August 2023, the U.S. Department of Justice charged Storm and fellow co-founder Roman Semenov with helping launder over $1 billion in crypto, including funds tied to North Korea’s notorious Lazarus hacker group.
Semenov is currently on the run, while another co-founder, Alexey Pertsev, was arrested in the Netherlands in August 2022 and is still awaiting trial.
The trouble for Tornado Cash began when OFAC sanctioned it in 2022 for facilitating anonymous crypto transactions, and the agency claimed that Tornado Cash had helped launder more than $7 billion since 2019 without implementing robust controls against misuse by cybercriminals.
