NEW YORK, NY – Criminal money laundering for tornado cash developer Rome Storm will begin in Manhattan Monday morning, when Storm’s lawyers and prosecutors will begin choosing a jury to oversee Storm’s four-week trial.
Storm was arrested in Washington State in 2023 and charged with conspiracy to engage in money laundering, conspiracy to violate U.S. sanctions and conspiracy to operate an unlicensed currency transfer business – charges – if the Storm is convicted, a maximum sentence of 45 years in prison. Storm’s tornado cash developer, Russian state Roman Semenov, faces the same charges, but still the entire charge. Another developer, Alexey Pertsev, is Convicted of money laundering In the Netherlands in 2024, he was sentenced to five years in prison. Attractive at present.
At the heart of the Storm case is Tornado Cash, a privacy-oriented cryptocurrency mix service that the government allegedly used to launder more than $1 billion in criminal proceeds of bad actors — including hacking operations approved by the North Korean state, they say constitutes our sance and his group while observing that view again. Meanwhile, the storm’s lawyer Think he is just an open source, decentralized software developer With reasonable, privacy-preserving purposes, you should not be responsible for the use of it by bad actors.
“The defensiveness here is that they are writing code, and (Tornado Cash) is designed for privacy – some people may have used it, but (Storm and colleagues) are not co-conspirators,” said Mark Biini, a partner at Reed Smith’s Global Regulatory and Law Enforcement Practice Group. “The reason the blender is controversial is because many people have undoubtedly used them, but the idea that some people want them to be used for privacy is also a reasonable argument. This will be a fierce battle here.”
Storm’s trial caught the attention of many in the cryptocurrency industry Gave people’s attention That, if the storm is found guilty, it may mean the offline developers On the hook For how people use their programs – this can have devastating consequences for the availability of privacy tools and the decentralized finances (defi) The whole space. Many of the major players in the industry, including the Investment Company Paradigm, the nonprofit advocacy group Coin Center and the Defi Education Fund, have submitted Amicus summary.
However, others are even more reluctant to accept Storm’s privacy defense. Economics writer JP Koenig wrote 2024 Blog Posts If the storm prevails in the trial, it could mean that anyone who wants to promote illegal activities will have a strong incentive to copy the tornado cash, effectively turning its operations into a “golem”, a “golem”, a kind of dead-free artificial artifact – running on a smart contract and then throwing away the keys to avoid the law. ”
Global Ledger, a Swiss blockchain analytics firm, wrote Blog Posts Overall, “there are more reasons why cybercriminals might want to use hybrid services than developers who legally want to confuse their personal money movement.”
Change the wind
The storm’s trial begins as the U.S. government continues to overhaul its approach to the cryptocurrency industry – especially crypto regulations. Under U.S. President Donald Trump, the White House has taken a more friendly stance to the industry (this $130 million was poured In the 2024 election, the Trump Inauguration Committee only participated in at least $18 million in congressional campaigns, raising regulators and law enforcement.
Since Trump took office in January, the SEC has taken a bogey under former chairman Gary Gensler for his so-called “law enforcement regulation” practices, has formed an industry-friendly cryptocurrency contingent and put a large number of open-ended cases and investigations into cryptocurrency companies. exist April memorandum to staffDeputy Attorney General Todd Blanche ordered the U.S. Department of Justice (DOJ) Staff “shrink” their focus on crypto crimes, instructing them to stop regulatory violations in cases involving cryptocurrencies.
Although some speculate that prosecutors will retreat to the storm case after Blanche’s memo, The government moves forwardonly a part of the cost is dropped. Prosecutors also choose to continue cases of the storm in March after the Treasury Department’s Office of Foreign Assets Control (OFAC) Apart from its list of sanctioned entities after a federal judge ruled that the agency could not approve the smart contract.
“Frankly, I’m a little surprised that it was after we saw the OFAC list that (Tornado Cash) was removed,” Bini said. “We don’t know the evidence of the administration yet, but we’ve seen that the Trump administration has indeed gotten rid of this kind of regulatory case. It seems to be a fringe, as the conspiracy to run a licensed currency transfer business (fees) does seem to be the type of business the government does.”
Trial Storm
Katherine Polk Failla, District Judge for the Southern District of New York, at a pretrial meeting last week, (sdny) The rule was found that neither party could file an OFAC sanction during the storm’s trial – either first approved tornado cash or subsequently revoked – thinking that this would confuse the jury. Failla also ruled that neither Van Loon vs. Treasury has mentioned the outcome of the relevant civil case.
Bini told Coindesk that Failla ruled that rulings that put OFAC in trials could help government cases better than storms.
Biney said if the defense could tell the jury that OFAC’s sanctions were later dropped, “I think you’re more likely to have the jurors say ‘Oh my God, I’m not sure if this is illegal.’ If they’re not sure, then the defendant has no charges.
Biney said Farara’s ruling provides potential reasons for a storm lawyer to appeal if the trial leads to a conviction.
“The defense may say, ‘Hey, we should have the right to bring this to the jury, and we think it is important evidence,” he said. “It is a case where even if the government is convicted as usual, there may be some legal illness.”
If the jury finds the storm guilty, Beanie said there may be another option besides appeals – a presidential pardon. Since taking office in January, Trump has pardoned many in the cryptocurrency industry, including co-founders of Bitmex and Silk Road founder Ross Ulbricht.
“Assuming this leads to a conviction, it doesn’t mean the president may not be involved,” Beeni said. “It’s a wildcard, and if the case leads to belief, we can see it here.”
In its last pretrial meeting on Friday, the Storm’s lawyers made a final effort after the government revealed its location theory to dismiss the case. (Basically, the reason why the prosecutor filed a case in southern New York) Storm conducted three evidence on texts from venture capitalists in New York, which is Storm’s interview with Bloomberg reporters in New York and the fact that hackers visited Tornado Cash from New York.
Failla finally ruled against the defense’s motion, allowing the government to trial the case against the storm.
The next four weeks
Due to the huge number of witnesses in the case, the storm’s trial is initially expected to be a full two months. The government told the court only that it plans to call more than 20 people to testify, including hackers using tornado cash, a so-called “victim” witness and many expert witnesses.
The jury selection is expected to take two days, and the opening argument may be scheduled for Wednesday.
Storm has not yet indicated whether he will testify in his defense, but Bini said it could be a big help in his defense.
“I think (the storm) will be very likely to testify. If it is, (he) will have to endure some very stiff cross-checks (checks), but that may be really strong in situations like this,” Beeni said. “The burden is government, not (the defense), but they may want to stand up and tell the jury their story.”
