Compass Investments

– Roman Storm, co-founder of Tornado Cash, has asked a U.S. federal judge to acquit him of a single count of unlicensed money transfer, as well as money laundering and sanctions offenses, arguing that prosecutors failed to prove his intent to assist criminals in the improper use of cryptomixer.

According to a September 30 filing in the U.S. District Court for the Southern District of New York and analyzed by Cointelegraph, Storm’s defense argues that the prosecution failed to present evidence that he knowingly assisted criminals in using Tornado Cash. According to the defense attorneys, this removes the basis for a conviction on the charge of reckless disregard.

Storm and the bad players claimed that he knew of their use of Tornado Cash and failed to take sufficient steps to deter them. This is an interpretation of negligence, the motion states.

The defense also notes that in the absence of evidence of intentional facilitation of bad players, the government attempted to meet the burden of intent by arguing that the defendant failed to prevent the abuse. This claim is contrary to the legal standard of intent and has no statutory support, the motion adds.

The motion for acquittal asks the judge to dismiss the charges or set aside the verdict because the evidence presented, even if accepted as true, is legally insufficient.

Tornado Cash is a mixer that utilizes zero-knowledge protocols to enhance transaction privacy. The platform was launched by Roman Storm and Roman Semenov in 2019 and allows users to hide the on-chain trace of their ETH.

The service soon found itself in legal trouble for allegedly being used to launder billions of dollars in illicit funds, including those linked to North Korean hackers. OFAC (US Office of Foreign Assets Control) accused Tornado Cash of facilitating the laundering: the system has processed over $7 billion in cryptocurrency since 2019, and about 30% of those funds were illegal in nature, according to their estimates.

Storm was arrested in late August 2023 and the company’s co-founder, Semenov, was placed on OFAC’s high-risk watch list. The operation was conducted by the Federal Bureau of Investigation and the Criminal Investigation Division of the Internal Revenue Service in Washington, DC. In late August, a spokesman for the U.S. Department of Justice opposed the retrial of Storm.

the case caused a sharp reaction in the crypto community. In August, the Blockchain Association, a U.S.-based lobbying organization, said Storm’s conviction could set a dangerous precedent for developers and privacy protections. The association emphasized that Storm had no control over the cryptocurrencies flowing through the protocol.

Roman Storm created privacy technology that operated without his direct oversight/control over Tornado Cash user funds. […] Tornado Cash functioned as a software product that did not require constant intervention, allowing users to retain full control over their assets at all times.

The broader crypto community emerged from a movement of crypto enthusiasts known as cryperpunks. While many are now focused on the financial aspects of blockchain, privacy continues to be a key battleground for the industry.

Last week, Ethereum co-founder Vitalik Buterin criticized the European Union’s chat control initiative, warning that it threatens the right to privacy in digital communication. The draft law obliges messengers to pre-check content on the client side for the presence of prohibited material.

You can’t make society safe by depriving people of protection, Buterin argued. He also noted that backdoors envisioned for law enforcement are inevitably susceptible to hacking and undermine the security of everyone.