Tornado Cash Co-Founder Gains Paradigm Support in Lawsuit

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When Tornado Cash Meets the Courtroom: A Legal Circus 🎪

  • Paradigm supports Roman Storm in the Tornado Cash lawsuit. 
  • The case could impact U.S. software and DeFi development. 
  • Ethereum Foundation donates $500K to Storm’s defense.

On June 13, the venture capital firm Paradigm, in a move that could only be described as a modern-day David versus Goliath, filed an amicus brief with the New York District Court. They argued on behalf of Roman Storm, one of the co-founders of Tornado Cash, who finds himself in a legal pickle. The complaint in United States v. Storm alleges that Storm laundered money and operated an unregistered money-transmitting company using his decentralized cryptocurrency anonymity technology. Paradigm claims that the prosecution must prove that Storm was not just a passive observer but an active participant in this alleged money-transmitting circus.

Storm was put on trial on July 2, 2025, on charges related to Tornado Cash, a software protocol that allows transactions on the Ethereum blockchain to be conducted privately. Prosecutors are accusing him of enabling more than a billion dollars in illegal funds. According to Paradigm’s brief, the jury must understand that to find Storm guilty, they need evidence that he charged fees, controlled funds, and knowingly dealt with criminal proceeds. Because, you know, being a software developer is just like being a bank robber, right? 🤷‍♂️

The case stems from Storm’s 2023 arrest. Tornado Cash is a non-custodial, immutable cryptocurrency mixing tool. Paradigm argues that programmers who develop open-source code without the ability to control its use should not be criminally liable. They even refer to FinCEN directives from 2014 and 2019 that conveniently forget to label software developers as money transmitters. How thoughtful of them!

Implications for Software Development

Paradigm warns that convicting Storm could turn the U.S. software development industry into a dystopian nightmare. The brief claims that blaming developers for the misuse of their code by third parties is akin to suing an auto manufacturer because someone decided to use their car for a bank heist. The company emphasizes that Tornado Cash was a decentralized application, meaning Storm had as much control over transactions as a cat has over its own shadow.

The lawsuit has attracted attention from the crypto community, with advocacy organizations like Coin Center and the Blockchain Association filing similar briefs in April 2024. They argue that the government has misinterpreted money-transmitting laws, which is a bit like misreading a recipe and ending up with a burnt soufflé. A March 2025 court decision in Texas that overturned Treasury sanctions against Tornado Cash and its smart contracts supports Storm, stating that code that cannot be altered is not property. Who knew code could be so philosophical?

Storm’s legal defense has garnered significant support, with the Ethereum Foundation contributing $500,000 and the community chipping in $750,000 to cover his $2 million legal fees. Paradigm previously contributed $1.25 million, proving that the crypto community knows how to rally when the chips are down. Storm insists he developed Tornado Cash to provide financial privacy, not to facilitate crime. Because, of course, who wouldn’t want to keep their financial affairs as private as a squirrel hiding its acorns?

The outcome of this trial could set a precedent for decentralized finance (DeFi) and open-source software. Legal authorities are watching closely, as a guilty verdict might scare developers away from creating privacy-centered tools, while an overturn could affirm the rights of software developers under current laws. It’s a classic case of “damned if you do, damned if you don’t.”

Oral arguments are scheduled for June 25, 2024, before Judge Katherine Polk Failla. The case continues to be the epicenter of discussions about privacy, innovation, and the ever-looming specter of overregulation in the cryptocurrency world. Buckle up, folks; it’s going to be a bumpy ride! 🚀

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2025-06-18 00:47