Tornado Cash Dev Roman Storm Moves to Dismiss Indictment Over Crypto-Laundering Allegations

Building
Tornado
Cash,
a
tool
that
can
be
used
to
obscure
the
origin
and
destination
of
cryptocurrency
transfers,
is
not
the
same
as
laundering
money,
said
a
motion
to
dismiss
the
criminal
indictment
against
developer
Roman
Storm.

Storm
and
fellow
developer
Roman
Semenov

were
indicted
last
summer
on
charges
of
conspiring
to
commit
money
laundering,
conspiring
to
operate
an
unlicensed
money
transmitter
and
conspiring
to
violate
the
International
Emergency
Economic
Powers
Act
(in
other
word,
to
violate
U.S.
sanctions).
Storm
was
arrested
and
released
on
bail.
The
U.S.
Department
of
Justice,
alleged
that
Tornado
Cash
facilitated
the
laundering
of
over
$1
billion
by
groups
like
North
Korea’s
Lazarus.
Tornado
Cash
has
been
sanctioned
by
the
U.S.
Treasury
Department
multiple
times
now.

“Storm
is
a
developer,
and
his
only
agreement,
together
with
the
members
of
his
U.S-based
company,
was
to
build
software
solutions
to
provide
financial
privacy
to
legitimate
cryptocurrency
users,”

Friday
night’s
filing
in
the
Southern
District
of
New
York
said.
“This
is
not
a
crime.”

The
motion
defines
Tornado
Cash,
describing
it
as
a
“set
of
non-custodial
smart
contracts
in
which
users
maintain
complete
ownership
and
control
over
their
assets
without
the
need
to
rely
on
any
service
provider
or
other
intermediary,”
as
opposed
to
custodial
mixing
services.
The
filing
also
disputed
the
idea
that
Tornado
Cash
is
a
mixer
or
a
service.

It
took
aim
at
how
the
indictment
described
the
Tornado
Cash
setup
and
Storm’s
ability
to
influence
it
by
the
time
period
the
indictment
focuses
on,
saying
that
Storm
did
not
have
the
ability
to
control
Tornado
Cash
or
prevent
its
use
by
Lazarus
and
similar
entities.

Moreover,
the
filing
said,
Tornado
Cash
does
not
fit
the
definition
of
a
“financial
institution”
because
users
maintain
control
over
their
funds
and
the
protocol
“did
not
charge
any
fee
but
was
a
free
and
open-source
software
tool.”

Storm
couldn’t
have
conspired
to
launder
funds
or
operate
a
money
transmitter
if
there
wasn’t
a
Tornado
Cash
enterprise
for
him
to
have
done
these
with,
the
filing
said.

The
filing
also
argued
that
Storm
and
other
developers
at
Peppersec
–
the
company
set
up
by
the
developers
–
never
made
an
agreement
with
“alleged
bad
actors,”
saying
the
U.S.
DOJ
was
“conflating
the
agreement
to
develop
and
publish
Tornado
Cash
code
with
a
(non-existent)
agreement
to
engage
in
purported
concealment
money
laundering.”

The
charges
against
Storm
are
similar
to
those
against

fellow
Tornado
Cash
developer
Alexey
Pertsev,
who
was
arrested
in
August
2022
and
went
on
trial
this
past
week
on
money
laundering
charges.
A
verdict
will
be
announced
in
May.
Friday’s
filing
noted
that
the
law
in
the
Netherlands,
where
Pertsev
was
arrested
and
tried,
is
different
from
the
U.S.
in
terms
of
the
specific
charges.

Friday’s
motion
to
dismiss
came
shortly
after
Storm’s
legal
team
filed
motions
to
have
the
DOJ
produce
certain
pieces
of
evidence
and
suppress
federal
agents’
efforts
to
seize
Storm’s
crypto
holdings
through
a
search
warrant.

The

motion
to
compel
asks
for
a
judge
to
order
the
DOJ
to
share
any
communications
between
U.S.
authorities
and
Dutch
authorities,
as
well
as
any
communications
from
the
Treasury
Department’s
Office
of
Foreign
Asset
Control
or
Financial
Crimes
Enforcement
Network
tied
to
Storm.

The

motion
to
suppress
argued
that
a
search
warrant
was
not
the
appropriate
tool
for
the
FBI
to
seize
“any
and
all
cryptocurrency”
found
in
Storm’s
home.
While
the
warrant
“allows
for
the
seizure
of
‘any
and
all
cryptocurrency,'”
this
is
“overbroad”
and
an
affidavit
does
not
“establish
probable
cause
to
believe
that
any
and
all
cryptocurrency
found
would
constitute
evidence
of
a
crime.”