Roman Storm, co-founder of the crypto mixing platform Tornado Cash, has urged a U.S. federal judge to dismiss criminal charges against him following a key appeals court ruling on the platform’s sanctions.
On Dec. 18, Storm filed a motion in a Manhattan district court, citing a recent Fifth Circuit Appeals Court opinion. The court ruled that the Treasury’s Office of Foreign Assets Control (OFAC) had exceeded its authority in sanctioning Tornado Cash’s smart contracts, rendering the charges against him “fatally and legally flawed.”
Storm’s motion argued that this ruling significantly impacts his charge of conspiring to violate the International Emergency Economic Powers Act (IEEPA). He highlighted that the smart contracts, as per the appeals court, “are not the ‘property’ of a foreign national or entity” and therefore “cannot be blocked” under the law.
The Fifth Circuit stated that Tornado Cash’s smart contracts are immutable and accessible to anyone, including sanctioned entities like North Korean hackers. The court added, “Mr. Storm could no more choose to stop them than he could choose to stop the sun from rising.”
In his motion, Storm pointed out that the district court had previously avoided ruling on the immutability of Tornado Cash’s smart contracts. However, the appeals court’s decision “resolved the issue as a matter of law,” leaving no grounds for a jury to deliberate.
Storm is also charged with operating an unlicensed money-transmitting business and conspiring to commit money laundering. He contended that Tornado Cash “is not a financial institution” and that the protocol became immutable in May 2020, predating the alleged conspiracy.
The Fifth Circuit’s ruling stemmed from a case initiated by Tornado Cash users with support from Coinbase in September 2022. While the users initially lost, they appealed and secured a victory in November 2023.
Storm and fellow co-founder Roman Semenov were charged in August 2023 for allegedly laundering over $1 billion in crypto through Tornado Cash, including funds linked to North Korea’s Lazarus Group. Semenov remains at large, while a third co-founder, Alexey Pertsev, is in pre-trial detention in the Netherlands.