TLDR
- Roman Storm’s motion to dismiss charges related to Tornado Cash was denied
- Judge Failla stated the allegations against Storm were plausible
- Storm faces three federal charges, including money laundering conspiracy
- The trial is set for December, with a potential 45-year sentence if convicted
- Tornado Cash co-founder Alexey Pertsev was previously convicted in the Netherlands
Roman Storm, a developer and co-founder of the cryptocurrency mixer Tornado Cash, is set to face criminal trial after a judge denied his motion to dismiss charges brought by the United States government.
The decision came during a September 26 telephone conference presided over by New York district court Judge Katherine Polk Failla.
Judge Failla rejected Storm’s bid to dismiss three federal charges, stating that government prosecutors had presented plausible allegations against him.
The charges include conspiracy to commit money laundering, conspiracy to commit sanctions violations, and conspiracy to operate an unlicensed money-transmitting business.
Storm and fellow co-founder Roman Semenov were initially charged in August 2023. Storm has pleaded not guilty to the charges and sought dismissal, arguing that Tornado Cash was open source software not under his control.
He positioned himself as a developer who created software to provide financial privacy for legitimate cryptocurrency users.
However, Judge Failla stated she
“cannot simply accept Mr. Storm’s narrative that he is being prosecuted merely for writing code.”
She added that she was convinced Tornado Cash differed from other financial services or money-transmitting firms.
The judge also noted the Justice Department’s accusation that Tornado Cash received nearly $1 million in funding from a venture capital firm with the expectation of profit-sharing.
Prosecutors contested Storm’s characterization of Tornado Cash, alleging that he “reaped millions of dollars in profits” while knowing the platform was being used for illicit money laundering.
Judge Failla remarked that according to the charges, the platform “was not an altruistic venture.”
The decision has sparked debate within the cryptocurrency community. Jake Chervinsky, chief legal officer of crypto venture firm Variant, criticized the ruling on social media platform X, calling it “an assault on the freedom of software developers everywhere” and “a perversion of law and a travesty of justice.”
Judge Failla's ruling denying @rstormsf's motion to dismiss the indictment is an assault on the freedom of software developers everywhere.
This will go down in history as a perversion of law and a travesty of justice.
And it will go down on appeal, if that's what it takes.
— Jake Chervinsky (@jchervinsky) September 26, 2024
Storm’s trial is scheduled for December 2. If found guilty on all three charges, he faces a maximum possible sentence of 45 years in prison.
This case follows the conviction of Tornado Cash’s third co-founder, Alexey Pertsev, in the Netherlands. In May, Pertsev was found guilty of laundering $1.2 billion through the platform by the ‘s-Hertogenbosch Court of Appeal and sentenced to five years and four months in prison. Pertsev is preparing to appeal his conviction.
The third co-founder, Roman Semenov, a Russian national, remains at large.
