SUMMARY

• A U.S. federal judge has ruled that Tornado Cash co-founder Roman Storm will face trial.
• The trial is scheduled to begin on December 2 in New York.

A U.S. federal judge has ruled that Roman Storm, co-founder of Tornado Cash, will face trial on charges of money laundering, in spite of his motion to dismiss the case. Amid a telephonic conference on September 26, District Judge Katherine Polk Failla of the Southern District of New York denied Storm’s request to dismiss three charges brought against him by the U.S. Department of Justice, concurring to Amanda Tuminelli, Chief Legal Officer at DeFi Education Fund.

The indictment recorded in August charged Storm of “knowingly facilitating” the crypto mixer’s laundering of over $1 billion in criminal proceeds. Alongside his co-founder Roman Semenov, Storm faces numerous serious allegations, including one count of conspiracy to commit money laundering and one count of conspiracy to violate the International Economic Emergency Powers Act, each carrying a maximum sentence of 20 years in prison. Furthermore, both are charged with conspiracy to operate an unlicensed money transmitting business, which might result in a five-year prison sentence.

Storm contended that the First Amendment protected his role in creating the Tornado Cash program. Be that as it may, Judge Failla ruled that the “functional capability” of code does not constitute speech under the First Amendment. She emphasized that the federal government’s activities to combat money laundering and evasion of sanctions are “wholly unrelated” to the suppression of free speech. Judge Failla stated that she did not believe Tornado Cash to be “meaningfully different” from other financial services or money-transmitting firms, reinforcing the court’s stance on regulatory oversight.

Jake Chervinsky, Chief Legal Officer at Variant Fund, communicated strong dissatisfaction with the ruling, calling it “an attack on the opportunity of software developers everywhere.” He accepts this administering will be remembered as a “perversion of law and a travesty of justice.” Tornado Cash is known for its cryptocurrency mixing capabilities, designed to give security by obfuscating the origin and destination of funds. It has been connected to North Korea-backed cyber hacking organization Lazarus, which allegedly utilized it for illegal purposes.

The trial for Roman Storm is set to commence on December 2 in New York, with expectations for it to last two weeks. Meanwhile, Roman Semenov, a Russian national, remains at large, adding another layer of complexity to the progressing legal procedures encompassing Tornado Cash and its founders. This case underscores the regulatory challenges confronting the cryptocurrency sector, especially as authorities intensify their investigation of privacy-focused technologies and their potential abuse in illegal activities.