Thomas Daniels
In a concerted move that underscores the escalating tensions between regulatory bodies and the cryptocurrency industry, the Blockchain Association, Coin Center, and DeFi Education Fund have collectively backed a legal plea urging the U.S. government to retract its accusations against Roman Storm, a principal figure behind the cryptocurrency mixing service, Tornado Cash.
The legal documents, submitted on April 5th to the Southern District of New York’s U.S. District Court, articulate a robust defense of Tornado Cash’s operational model, emphasizing that the platform did not exert any form of control over the transactions or communications its users initiated. Furthermore, the advocacy entities posited that the trio of felony allegations confronting Storm—a breach of sanctions, among others—should be invalidated, pointing to significant First Amendment considerations and highlighting a fundamental misunderstanding by the U.S. government of the relationship between smart contract protocols and their creators, particularly in the context of money laundering accusations.
Marisa Coppel, the Blockchain Association’s Chief Legal Officer, voiced a compelling argument against the prosecutorial stance, stating, “The acceptance of the government’s legal theory would not merely cast a shadow over the digital asset realm but also provoke profound apprehensions concerning the broader fintech ecosystem.” Coppel continued, advocating for the judiciary to fulfill its role in ensuring the government meets its evidentiary burden and to absolve the accused, thereby protecting the rights of the involved parties and the integrity of the nascent digital asset industry.
The backdrop to this legal challenge involves the U.S. Department of Justice’s announcement in August 2023 of its decision to levy charges against Storm and his colleague, Roman Semenov. Despite Storm’s plea of innocence to all counts and his conditional release on a $2 million bond, Semenov remains at large. Storm’s trial is slated for September.
Adding complexity to the case, Alexey Pertsev, another developer associated with Tornado Cash, faced arrest in the Netherlands in August 2022, accused of facilitating North Korean hacking factions in laundering close to $1 billion through the crypto mixer. After approximately nine months of incarceration, Pertsev was released.
This legal saga is further intertwined with the U.S. Treasury’s Office of Foreign Asset Control’s decision to designate crypto addresses linked to Tornado Cash as Specially Designated Nationals, a move that has incited legal challenges from crypto advocates, albeit with appeals pending following initial setbacks in their litigation efforts.
