Roman Storm, co-founder of Tornado Cash, has asked a US federal judge to acquit him of his sole conviction for unlicensed money transmission and the jury’s hung counts for money laundering and sanctions violations, arguing prosecutors failed to prove he intended to help bad actors misuse the crypto mixer.
According to legal documents filed on Sept. 30 to the US District Court for the Southern District of New York and reviewed by Cointelegraph, Storm’s defense argued prosecutors failed to prove he intended to help bad actors use Tornado Cash. This, according to the defense, would nullify the grounds for his conviction based on negligent inaction.
“Storm and bad actors was a claim that he knew they were using Tornado Cash and failed to take sufficient measures to stop them. This is a negligence theory,” the motion states.
The defense further claims that “lacking affirmative evidence that Mr. Storm acted with the intent to assist bad actors, ”the government attempted to meet its willfulness burden by claiming that the defendant failed to prevent misuse. “It is a claim that is antithetical to the willfulness standard and unsupported by the law,” the motion states.
A motion for acquittal asks the judge to throw out charges or a verdict because the prosecution’s evidence, even if taken as true, is legally insufficient.
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Fighting for the right to privacy
Tornado Cash is a decentralized and non-custodial smart contract-based Ether (ETH) mixer that leverages zero-knowledge proof-based encryption to enhance transaction privacy. It was launched by Roman Storm and Roman Semenov in 2019 and allows users to break the onchain traceability of their ETH.
The service ended up in legal trouble primarily because it was allegedly used to launder billions of dollars in illicit funds, including funds linked to North Korean hackers. Tornado Cash was also accused of facilitating money laundering, with the US Office of Foreign Assets Control (OFAC) claiming it processed over $7 billion in digital currency since 2019 and 30% of it was allegedly linked to illegal activities.
Storm was arrested in late August 2023, while co-founder Semenov was added to OFAC’s Specially Designated Nationals list. The arrest was conducted by the Federal Bureau of Investigation and the Internal Revenue Service’s Criminal Investigation Division in Washington, D.C. In late August, a US Department of Justice official opposed Storm’s retrial.
The case has drawn sharp criticism from the crypto industry. In August, the pro-crypto US lobby group Blockchain Association stated that Storm’s conviction could set a “dangerous” precedent for developers and privacy. The group also pointed out that Storm did not exercise control over the crypto that went through the protocol.
“Roman Storm built privacy tech that operated without his custody/control over the funds of Tornado Cash users. […] Tornado Cash functioned as non-custodial software, meaning that users maintained total control of their assets at all times.”
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Crypto community at the forefront of the fight for privacy
Bitcoin (BTC) and the broader crypto community were born from a pro-cryptography movement known as the cypherpunks. While many in the crypto community are now focused solely on the financial aspects of blockchain technology, privacy remains a central battleground for the industry.
Last week, Ethereum co-founder Vitalik Buterin criticized the European Union’s proposed “Chat Control” legislation, warning that it threatens the right to privacy in digital communications. The law in question would require messaging platforms to introduce client-side pre-encryption scanning of content for illegal content.
“You cannot make society secure by making people insecure,” Buterin argued. He also highlighted that backdoors built for law enforcement are “inevitably hackable” and undermine the safety of everyone.
Some experts view this as a misstep by regulators that will prompt users to turn to ungovernable web3 alternatives. Hans Rempel, co-founder and CEO of Diode, recently told Cointelegraph that the law is a dangerous overreach and “giving an inherently corruptible entity nearly unlimited visibility into the private lives of individuals is incompatible with an honest value statement of digital privacy.”
Magazine: Can privacy survive in US crypto policy after Roman Storm’s conviction?