The United States Department of Justice (DOJ) is making a strong case against Roman Storm, co-founder of the cryptocurrency mixer Tornado Cash, by challenging a motion to dismiss the charges against him.
According to the DOJ, the complexities involved in the case present disputed facts that are more appropriately suited for a jury to consider, rather than being dismissed at this early stage.
Tornado Cash Under Scrutiny
Introduced in 2019, Tornado Cash has been a contentious subject for U.S. authorities who allege that the service was used by entities like North Korea’s Lazarus Group to launder money. The service comprises various components including a website, a user interface, smart contracts, and a network of “relayers.”
Roman Storm, alongside Roman Semenov, faces accusations of conspiring to commit money laundering and operating an unlicensed money transmitter, among other charges.
Legal Arguments and Defense
In a significant turn of events in late March, Storm’s legal team argued for dismissing the indictment, stating that Tornado Cash does not function as a custodial service and thus should not be classified as a “financial institution” under current legal frameworks.
They also contended that Storm did not have control over the service to restrict its use by sanctioned entities like the Lazarus Group.
However, the DOJ refuted these claims in their latest filing. They argued that Storm played an active role in operating the crypto mixer and accused him of creating systems that facilitated anonymity for criminals.
The filing specifically criticized the lack of adequate measures by Tornado Cash’s co-founders to block sanctioned addresses from using the service.
Broader Implications for the Crypto Industry
This case emerges amid an ongoing crackdown by the U.S. government on crypto-mixing services, highlighted by the recent arrests of the co-founders of another crypto mixer, Samourai Wallet.
These developments have sparked significant discussion within the crypto community about the nature of such services and their legality.
Ki Young Ju, CEO of CryptoQuant, noted that crypto mixing services are not inherently criminal, indicating the nuanced debate surrounding the use of privacy-enhancing technologies in the cryptocurrency space.
As this legal battle unfolds, it will likely set precedents for how decentralized crypto services are treated under U.S. law and could shape the regulatory landscape for the broader cryptocurrency industry.
