Tornado Cash co-founder seeks dismissal of US crypto-laundering charges

Roman Storm, one of the founders of Tornado Cash, a cryptocurrency blending service, aims to refute each of the three charges levied against him. These allegations include his involvement in running an illegal money laundering scheme and violating the International Emergency Economic Powers Act.

In a court filing on March 29, 2023, Mr. Storm’s lawyers stated that there is no way to conclude he was involved in laundering funds through a conspiracy.

Lawyers for the Storm entity argued that Tornado Cash had already been made public and unalterable by its creators before it was adopted by hacking groups under US sanctions by the Department of the Treasury.

Due to the circumstances, it’s claimed that Storm had limited ability to stop a designated entity from utilizing it.

According to reports, Tornado Cash is accused by prosecutors of aiding the North Korean Lazarus Group in bypassing American sanctions. This supposedly allowed the regime to fund its nuclear initiatives financially.

Additionally, the legal team contended that Tornado Cash didn’t qualify as a money-transmitting business since it didn’t levy transaction fees and gave users full authority over their digital currencies.

According to reports, Storm aimed to develop software to safeguard financial confidentiality for legitimate cryptocurrency users. The accusations against him, they argued, are fundamentally weak and unfounded.

In September 2023, Storm denied any wrongdoing regarding the accusations against him. Following his apprehension, he was granted bail in the amount of $2 million. His freedom comes with conditions, primarily limiting his travel to designated areas in New York, New Jersey, Washington, and California.

The US government continues its tough stance against cryptocurrency tumbling platforms.

Instead, in the world of cryptocurrencies, users highly regard the use of crypto mixers due to their ability to enhance privacy and discretion for individuals engaging in confidential business deals.

At a certain stage, the Arbitrum Decentralized Autonomous Organization (DAO) suggested moving around $1.3 million worth of ARB tokens to pay for Storm’s legal expenses.

The proposition highlighted Tornado Cash as a leading privacy and security solution in the cryptosphere, empowering users with a protected method for carrying out confidential Ethereum blockchain deals.

At that point in time, the Arbitrum community declared that no individual should face unjust intrusions into their privacy, family matters, homes, or correspondence, or endure assaults on their reputation and honor. Everyone is entitled to legal defense against such invasions or defamation.

The plan has since been removed (the reasons for its removal are unclear).

In February, GoFundMe terminated a campaign on their platform seeking funds for legal fees related to the Tornado Cash case. They explained that this violationated their terms of service, which prohibit fundraisers with potential risks or legal liabilities for GoFundMe, its employees, or users. Regardless of the $30,000 raised, all contributions were returned after the campaign was closed.

The Office of Foreign Assets Control (OFAC) placed the mixer under sanctions in August 2022.

The mixing service was restricted due to its role in cleaning up over $7 billion worth of ill-gotten gains, as reported by American authorities. It’s been disclosed that this service has been utilized extensively by hackers from the North Korean cybercrime group Lazarus for money laundering purposes since its creation.

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2024-03-31 17:24