Tornado Cash Sanctions Reversal Has No Effect on Developers' Trial, Says DOJ
Tornado Cash developer Roman Storm seeks to dismiss charges after a Fifth Circuit ruling reversed sanctions against the software. The US Government argues this reversal doesn't impact the criminal trial, asserting the case primarily concerns control over the Tornado Cash user interface.
- In a motion filed on January 17, 2025, the US Government continues to accuse Roman Storm and his associates of aiding the Lazarus Group in money laundering by funding infrastructure, maintaining algorithms, and leveraging smart contracts to enhance the anonymity for Tornado Cash users.
- On December 18th, Roman Storm has renewed his bid to dismiss money laundering and sanctions violation charges, citing a recent Fifth Circuit decision that found the company's smart contracts were not a sanctionable property.
- The US Department of Justice (DOJ) prosecutors now claim that the sanctions reversal doesn't impact the criminal trial against Tornado Cash developers, adding that the case is about control over the Tornado Cash user interface, not the validity of the sanctions.
- The filing repeats that Storm intentionally took part in and facilitated money laundering transactions and can be held liable for this conduct, even if the transactions could have occurred without his deliberate involvement.
"The defendant [...] regurgitates arguments about the supposed requirement that a money transmitting business have "custody" or "control" of the funds being transferred. For the reasons already briefed at length, that argument is meritless and finds no support in the statute or the case law," was stated in the argument.
- "The Government's opposition highlights the DOJ's continued willingness to leverage criminal enforcement as a tool to shape the law – in this case specifically to introduce FATF recommendation 66 on the classification of non-custodial UIs as a category of a "Virtual Asset Service Provider", which have not yet been adopted by the US," writes L0la L33tz for The Rage.
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Wake up babe, there's a new filing in Tornado Cash, and it's just about as embarrassing as the rest of the shitshow the DOJ has been assembling over the past two years 👇
This time, it persists that Storm profited from Tornado Cash smart contracts, arguing directly against arguments made by the Fifth Circuit, which found that "none of the immutable smart contracts entitle the smart-contract creators to a benefit."
Imagine a car manufacturer being held liable for profiting from illicit activity because a car they manufactured was used in a bank robbery, or a computer manufacturer because a machine they sold was used in a hack.
Tornado Cash should have stopped illicit activity, even though we concede that Tornado Cash couldn't stop illicit activity, or so the argument goes.
What about the Chainalysis sanctions oracle Tornado Cash implemented to block OFAC listed entities from accessing the service?
That's "window dressing," the Government says – an inefficient step that was only taken to "make a public announcement that TC wasn't violating the law." OK then.
The Government continues to appear to allege that the sole purpose of Tornado Cash was to enable criminal transactions, again making references to the prosecution of Silk Road operator Ross Ulbricht – ignoring the fact that while Silk Road operated as a dark net market, Tornado Cash illicit transactions are only estimated to have made up around 14% of overall activity be the Government's own calculations, primarily pertaining to funds originating from hacks.
What's worse is that the Government doubles down on charging the developers for the development of a User Interface, continuing to attempt to enforce FATF recommendation 66 against FinCEN guidance and despite the lack of official adoption.
This case is a complete abomination of the US justice system. Everyone working on its prosecution should be fired.
https://www.therage.co/doj-tornado-cash-motion-to-dismiss/
The Rage Article / Archive
DOJ Filing
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