Tornado Cash Co-Founder Seeks Dismissal of Federal Charges

Crypto News Regulation

Written by Aaron S.,

Editor-In-Chief

Last Updated: December 20, 2024

Key Takeaways

Roman Storm argues Tornado Cash's immutable contracts are not "property" and cannot be sanctioned under US law;
Storm's defense highlights that Tornado Cash's creators had no control over its use, impacting key accusations against him;
Claims of money laundering and unlicensed operations are disputed, as Tornado Cash stopped functioning as a financial institution in 2020.

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Tornado Cash Co-Founder Seeks Dismissal of Federal Charges

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Tornado Cash's co-founder, Roman Storm, asks a United States federal judge to drop the criminal charges against him.

In a motion filed on December 18 in a Manhattan district court, Storm pointed out that the appeals court ruled Tornado Cash’s smart contracts cannot be considered “property” of a foreign entity.

The court stated that these contracts, which are self-operating and cannot be altered, are not subject to sanctions under the International Emergency Economic Powers Act (IEEPA). Storm’s lawyers say this finding directly impacts his accusation of conspiring to violate the IEEPA.

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The Fifth Circuit’s opinion also emphasized that Tornado Cash's creators had no control over how the protocol was used. The court noted that anyone, including bad actors, could use the protocol. According to the court:

Mr. Storm could no more choose to stop them than he could choose to stop the sun from rising.

The motion also addresses other accusations against Storm, including involvement in money laundering and operating an unlicensed money-transmitting business.

His lawyers argue there was no agreement to commit money laundering, as the alleged conspiracy began months after the protocol could no longer be changed. They also say these charges are invalid because Tornado Cash has not functioned as a financial institution since it became immutable in May 2020.

The legal dispute over Tornado Cash began when six of its users, backed by Coinbase $1.58B , challenged the US Treasury’s Office of Foreign Assets Control (OFAC)’s sanctions in 2022. While initially lost, they appealed in court in November 2024. How did the legal battle go? Read the full story.