TL;DR
- Roman Storm, co-founder of Tornado Cash, has petitioned a federal judge to drop criminal charges against him following a ruling that OFAC overstepped its authority in sanctioning Tornado Cash’s smart contracts.
- Tornado Cash, a decentralized platform for mixing cryptocurrency transactions, was involved in laundering over $1 billion, including funds linked to North Korea’s Lazarus group, leading to charges against Storm and co-founder Roman Semenov.
- The Fifth Circuit Appeals Court ruled that Tornado Cash’s smart contracts are not the “property” of any foreign national or entity, and Storm’s motion argues this ruling undermines the legal basis for the charges against him.
Roman Storm, co-founder of the cryptocurrency mixing platform Tornado Cash, has petitioned a United States federal judge to drop the criminal charges against him. This request follows a recent ruling by the Fifth Circuit Appeals Court, which found that the OFAC had overstepped its authority in sanctioning Tornado Cash’s smart contracts. The court’s decision has significant implications for Storm’s case, potentially undermining the legal basis for the charges against him.
Background on Tornado Cash and OFAC Sanctions
Tornado Cash is a decentralized platform that allows users to mix their cryptocurrency transactions, enhancing privacy and anonymity. In August 2023, Storm and fellow co-founder Roman Semenov were charged with helping launder over $1 billion in cryptocurrency through Tornado Cash, including funds linked to the North Korean hacking group Lazarus.
The charges included conspiring to violate the International Emergency Economic Powers Act (IEEPA), operating an unlicensed money-transmitting business, and money laundering conspiracy.
Appeals Court Ruling
The Fifth Circuit Appeals Court’s ruling in November 2023 was a pivotal moment for Tornado Cash. The court found that OFAC had unlawfully sanctioned Tornado Cash’s smart contracts, stating that these contracts are not the “property” of any foreign national or entity and therefore cannot be blocked under the IEEPA.
The court emphasized that Tornado Cash’s smart contracts are immutable and can be used by anyone, including sanctioned entities, without the creators’ ability to intervene.
Roman Storm’s Motion to Dismiss
In a motion filed on December 18, 2024, in a Manhattan district court, Storm argued that the appeals court’s opinion renders all three counts of the indictment against him legally flawed.
He contended that Tornado Cash is not a financial institution and that the protocol became immutable in May 2020, four months before the alleged start of the conspiracy. Storm’s motion also highlighted that the district court had previously declined to rule on the immutability of Tornado Cash, but the appeals court had now decided this issue as a matter of law.
