The US Department of Justice (DOJ) has responded to Tornado Cash developer Roman Storm’s motion to dismiss the criminal charges against him. In a filing made public on March 31, the DOJ refuted several arguments made by Storm’s lawyers while urging the court to ensure a fair trial.
The US Department of Justice has responded to the motion from Roman Storm, developer of Tornado Cash, to dismiss the criminal charges brought against him by the government. In a document submitted last Friday, the DOJ disputed several points raised by Storm’s legal team and urged the court to proceed with a fair trial.
DOJ Fires Back At Roman Storm
On August 23rd, the Department of Justice (DOJ) revealed indictments against Storm and Roman Semenov, co-founders of Tornado Cash, for their involvement in establishing, managing, and marketing this widely-used crypto mixing platform. The US authorities accused them of conspiring to facilitate money laundering, violate the International Economic Emergency Powers Act (IEEPA), and run an unlicensed money transfer business.
In response to the accusations made against him, Storm, who is presently in US custody, submitted a motion to dismiss on March 29. One of his arguments was that Tornado Cash shouldn’t be considered a money-transmitting business because it doesn’t take control of users’ funds at any stage.
The DOJ has countered this claim, asserting that not all money-transmitting businesses, including those in the cryptocurrency sector, are required to manage user funds based on FinCEN regulations and the provisions of Section 1960 of the US Code. According to the plaintiff’s argument, crypto money transmitters function as intermediaries facilitating value transfers between customers while preserving their anonymity.
As an analyst, I’ve discovered that the US prosecutors have brought up a significant point in their case against Storm and his team. They emphasized that during the period from August 2019 to March 2022, which is mentioned in the indictment, Storm and his developers retained control over specific user transactions on Tornado Cash. This finding contradicts Storm’s earlier assertion that developers held minimal influence over users’ actions on the mixer.
A statement from the petition read:
The Tornado Cash founders personally approved each individual relayer who was permitted to process withdrawals and kept a record of these approved relayers. In February and March 2022, they developed and implemented an automated “relayer selection algorithm,” which utilized a mathematical formula to assign relayers to specific customer withdrawal requests.
Legal Battle Over Tornado Cash Intensifies
The Justice Department’s recent petition introduces a fresh development in a potentially pivotal legal case for the web3 development community.
The DOJ has constructed its case against Tornado Cash based on the platform’s interaction with sanctioned entities like the North Korea-linked Lazarus Group. However, the US prosecutors’ effort to indict the developers for users’ misconduct on their decentralized finance (DeFi) service has sparked intense debate within the crypto community.
Three pro-crypto organizations have thus far filed amicus briefs, expressing their concerns and supporting the defendants in this significant US crypto case that could establish a precedent.
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2024-04-28 20:11