Roman Storm, co-founder of the cryptocurrency mixer Tornado Cash, is facing three charges related to money laundering and violations of the International Emergency Economic Powers Act. However, Storm’s legal team argues that Tornado Cash was developed and made publicly available before it was utilized by sanctioned hacking groups. They claim that Storm had limited control over preventing a sanctioned entity from using the platform. The charges are based on allegations that Tornado Cash helped the North Korean Lazarus Group evade U.S. sanctions.
Storm’s lawyers assert that Tornado Cash did not function as a money-transmitting business since it did not charge a fee for transmitting funds and users had full control over their cryptocurrencies. They argue that Storm’s intent was to create software solutions that provided financial privacy for legitimate cryptocurrency users. In September 2023, Storm pleaded not guilty to the charges and was released on a $2 million bond. He currently faces travel restrictions limiting him to certain regions in New York, New Jersey, Washington, and California.
The U.S. government has been cracking down on crypto-mixing services, as seen in the recent conviction of the founder of Bitcoin Fog on money laundering charges. Roman Sterlingov was found guilty of various financial crimes related to operating an unlicensed money-transmitting business. Storm sought support from right-to-privacy advocates ahead of his criminal trial in 2024. The Arbitrum DAO submitted a proposal to allocate approximately $1.3 million worth of Arbitrum tokens to assist Storm, but the proposal was later removed without explanation.
A crowdfunding campaign on GoFundMe to raise legal fees for Storm was canceled due to a breach of the platform’s terms of service. The U.S. Treasury has added Tornado Cash to its Specially Designated Nationals list, prohibiting Americans from using the mixer. Storm’s defense team contends that the charges against him are flawed and should be dismissed, given the circumstances surrounding the operation and development of Tornado Cash. Storm’s case is said to set a major precedent for the industry, affecting developers and privacy advocates involved in Web3 technologies. Despite the legal challenges, Storm remains determined to fight the accusations against him.
