Co-founder of Tornado Cash seeks dismissal of money laundering charges

Roman Storm, co-founder of cryptocurrency mixer Tornado Cash, is seeking to dismiss the charges against him, claiming that he did not engage in money laundering or violate any laws. In a filing to the United States District Court for the Southern District of New York, Storm’s lawyers argued that Tornado Cash was developed and publicly available before it was used by the hacking groups sanctioned by the US Department of Treasury. They asserted that Storm had no control over the actions of these groups when they used Tornado Cash for illicit purposes.

The charges against Storm revolve around Tornado Cash allegedly aiding the North Korean Lazarus Group in bypassing US sanctions and funding the country’s nuclear program. Storm’s lawyers claimed that Tornado Cash did not function as a money-transmitting business since it did not charge any fees for transactions and users had full control over their cryptocurrency. They argued that Storm’s intention was to create software solutions that would protect the financial privacy of law-abiding crypto users.

In September 2023, Storm pleaded not guilty to the charges and was released on a $2 million bond, with limited travel restrictions imposed on him. This legal action against Storm is part of the US government’s broader crackdown on crypto-mixing services. Previously, the founder of Bitcoin Fog, a major crypto-mixer, was convicted of money laundering. Despite these crackdowns, the crypto community still recognizes the value of crypto mixers for enhancing privacy and confidentiality in legitimate business transactions.

Interestingly, there was a proposal by the Arbitrum DAO to allocate funds to support Storm’s legal expenses, but it has since been removed without explanation. The reasons behind its removal remain unclear. This case highlights the ongoing debate surrounding the role of crypto mixers, with views divided on their potential for protecting privacy versus their potential for facilitating illicit activities. As the legal proceedings continue, the outcome of Storm’s motion to dismiss the charges will be closely watched by both the crypto community and regulators.

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