Tornado Cash Founder Seeks Dismissal Of Charges After Appeals Court Ruling

Tornado Cash co-founder Roman Storm requested that criminal charges against him be dismissed, citing a recent appeals court decision declaring sanctions on the platform’s smart contracts unlawful.

In a motion filed in Manhattan federal court, Storm argued that the Fifth Circuit Appeals Court’s ruling undermines the legal foundation of the charges against him. The court previously found that the U.S. Treasury’s Office of Foreign Assets Control (OFAC) overstepped its authority by sanctioning Tornado Cash’s immutable smart contracts, which cannot be controlled or altered by any individual or entity.

Storm’s motion claims this ruling invalidates allegations of conspiring to violate the International Emergency Economic Powers Act (IEEPA), as the smart contracts do not constitute “property” subject to sanctions under the law. The appeals court added that Tornado Cash’s technology operates autonomously, making it impossible for its creators to prevent its use, even by sanctioned entities like North Korean hackers.

In addition to IEEPA violations, Storm faces charges of operating an unlicensed money-transmitting business and conspiracy to launder money. He argued these accusations are baseless as Tornado Cash ceased to be under anyone’s control after it became immutable in May 2020, months before the alleged conspiracy began.

Storm’s motion follows a broader legal battle against OFAC’s actions, initiated by six Tornado Cash users with support from Coinbase. Although the case was initially dismissed, the appeals court reversed the decision in November 2023.

Storm, along with co-founder Roman Semenov, was charged in August 2023 for allegedly facilitating over $1 billion in illicit transactions through Tornado Cash, including funds linked to the Lazarus Group, a North Korean hacking organization. Semenov remains at large, while a third co-founder, Alexey Pertsev, has been detained in the Netherlands since August 2022.

Storm saw his criminal trial delayed until April. The four-month postponement allows both sides more time to address a contentious issue over expert witness disclosures. Judge Katherine Polk Failla of the Southern District of New York previously ordered that both parties share details about their expert witnesses in preparation for trial.

Storm’s defense team pushed back on the disclosure requirement, arguing it could unfairly reveal their defense strategy and “greatly prejudice Mr. Storm.” They further stated that Judge Failla’s directive conflicts with federal rules, which generally prevent the government from compelling the defense to disclose expert witness details unless it requests similar information from the prosecution—a step Storm’s defense team intentionally avoided.

Storm’s trial, now scheduled to begin April 14, 2024, is expected to last two weeks. If convicted on all counts, Storm could face up to 45 years in prison.