Tornado Cash developer gets help in court from blockchain advocacy groups

Three blockchain advocacy groups have filed amicus curiae briefs on April 5 to defend Tornado Cash developer Roman Storm from criminal charges in the US.

The filings support Storm’s motion to dismiss the charges against him and present several arguments to ensure developers are protected from such legal action.

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The Blockchain Association said the government’s case has a “critical flaw,” and its adoption could have “adverse repercussions” for the crypto industry.

The group’s head of legal, Marisa Tashman Coppel, asserted that the government’s treatment of Tornado Cash as an unlicensed money transmitter is unfounded. Under 18 USC § 1960 & FinCEN regulations, money transmitters must have wholly independent control over user assets.

She said:

Without the ability to independently move funds on a user’s behalf, one cannot be a money transmitter.”

Tornado Cash and the developers do not have control over funds because the protocol is self-executing and immutable. Users instead maintain control over their assets, which are held in pools managed by non-custodial smart contracts.

CoinCenter weighs in

CoinCenter’s Director of Research, Peter Van Valkenburg, said the US government  “wrongly charged the Tornado Cash developers with criminal conspiracy.”

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Like the Blockchain Association, Valkenburg and CoinCenter minimized developers’ role in Tornado Cash’s operations by referring to the platform’s smart contract-based pools.

Valkenburg also explained how Tornado Cash’s software tools and UI are non-essential, meaning that the defendants did not execute transactions, comingle assets, receive funds, or provide secret notes — even if the platform was used for those purposes.

He compared Tornado Cash to TurboTax, which provides users with a useful way to do taxes but cannot file and pay taxes on their behalf.

CoinCenter also advanced legal arguments supporting software publication as free speech and supporting statutory exemptions for informational transactions. It compared Tornado Cash to SWIFT, stating that both platforms should be free from direct sanctions because each only handles information.

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DeFi Education Fund

The DeFi Education Fund argued that developers should not be held responsible when a third party uses their software for criminal activity.

The group’s Chief Legal Officer, Amanda Tuminelli, explained that the US government has never used a particular statute, the International Emergency Economic Powers Act (IEEPA), in a comparable way.

In over 100 other recent cases surveyed by the DeFi Education Fund, the government accused the defendant of interacting with a sanctioned counterparty. However, developers of platforms like Tornado Cash do not have any such counterparties.

Motion to dismiss

Storm and his lawyers initially filed a motion to dismiss the criminal charges on March 29. The amicus curiae filings from each advocacy group explicitly support that motion.

It is not yet clear whether the motion for dismissal will succeed, as the case is still in its early proceedings. The US Department of Justice charged Roman Storm in August 2023, and he will remain on bail until his September trial.

The US Department also charged another Tornado Cash developer, Roman Semenov, alongside Storm. Semenov’s location is unknown.

The US Treasury and OFAC sanctioned Tornado Cash in August 2022, alleging that the platform has laundered over $7 billion of crypto since 2019. It linked a fraction of that activity to the North Korean state-sponsored group Lazarus Group.

Posted In: US, Featured, Legal

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Author: Mike Dalton

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