Judge denies motion to dismiss case against Tornado Cash founder
The case against Tornado Cash founder Roman Storm for alleged money laundering and sanctions violations will continue, judge rules
Akif CUBUK/Shutterstock modified by Blockworks
A US federal judge has denied two court motions from Roman Storm, a co-founder of Tornado Cash, ruling that the US government’s case against him will continue.
Judge Katherine Polk Failla denied Storm’s motion to dismiss all three charges against him and his motion to compel discovery.
“At this stage in the case, this court cannot simply accept Mr. Storm’s narrative that he is being prosecuted merely for writing code,” Failla said during a telephone conference Thursday. “For starters, that’s an overstatement of what’s actually charged in the indictment.”
Storm and fellow Tornado Cash co-founder Roman Semenov were indicted in August 2023. The pair was charged with three federal counts: conspiracy to commit money laundering, conspiracy to commit sanctions violations, and conspiracy to operate an unlicensed money transmitting business.
Read more: Crypto mixers have their day in court
“While publicly claiming to offer a technically sophisticated privacy service, Storm and Semenov in fact knew that they were helping hackers and fraudsters conceal the fruits of their crimes,” US Attorney Damian Williams said in a statement at the time.
Storm in March 2024 filed a motion to dismiss the charges, arguing that simply building the protocol is not money laundering, which requires a “financial transaction involving a financial institution.” Since users maintain control of their assets when using Tornado Cash and no fees are charged, the protocol cannot be a “financial institution,” Storm’s team said.
Prosecutors, in their opposition to the motion, argued that Tornado Cash was a money transmitting business and, therefore, a financial institution.
Failla on Thursday said that the US government’s indictment against Storm met the requirements for “sufficiency.”
“As I understand the charges in the indictment, the Tornado Cash enterprise was not an altruistic venture,” Failla added. “Among other things, the indictment alleges that Mr. Storm and other Tornado Cash founders solicited approximately $900,000 in financing from a venture capital fund in exchange for an expectation that the funds would receive a share of future profits from the Tornado Cash service.”
Storm in March also attempted to order the government to release any and all communications between government agencies concerning Storm and Semenov, Tornado Cash and Tornado Cash developer Alexey Pertsev.
In her denial of the motion to compel, Failla said the defense did not adequately prove that this information is “material to the defense’s preparation.”
Thursday’s ruling comes months after a Dutch court found Pertsev guilty of laundering $1.2 billion of crypto through Tornado Cash.
Storm and Semenov’s case will proceed to discovery, Failla ruled. A jury trial is scheduled to begin on Dec. 2, 2024.
This is a developing story.
Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.
Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.
The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.
