Roman Storm, the co-founder of the controversial crypto mixing platform Tornado Cash, is pushing to have criminal charges dropped, citing a recent ruling from the Fifth Circuit Court of Appeals. The ruling, which found that the U.S. Department of the Treasury’s OFAC overstepped its authority in sanctioning Tornado Cash’s smart contracts, is central to Storm’s defense in his ongoing trial.
In a motion filed on December 18 in Manhattan federal court, Storm argued that the Fifth Circuit’s opinion, issued last month in a separate case, undermines the foundation of the charges against him.
The appeals court’s decision clarified that Tornado Cash’s smart contracts are not the “property” of any foreign individual or entity, and thus, cannot be blocked under U.S. law. Storm contends that this ruling directly impacts his charge of conspiring to violate the International Emergency Economic Powers Act (IEEPA), which grants the U.S. government authority to sanction individuals and entities posing a threat to national security.
Court Decision Casts Doubt on Smart Contract Sanctions
The Fifth Circuit stated that the Tornado Cash smart contracts, which are decentralized and immutable, are not under the control of the platform’s creators. The court described the contracts as being akin to an “open-source software” that cannot be altered or stopped by Storm or his co-founders, including Roman Semenov, who remains at large.
As such, the court ruled that they could not be held responsible for the use of the platform by any party, including those linked to North Korean hacking groups, like the Lazarus Group.
Storm’s motion points out that the district court had previously refrained from ruling on the platform’s immutability when it denied his motion to dismiss in September. However, he argues that the appeals court’s opinion has definitively settled the matter, leaving no questions for a jury to decide.
Legal Challenges and Further Charges
Storm, who faces charges related to operating an unlicensed money-transmitting business and conspiracy to launder money, maintains that the charges should also be dismissed. He argues that Tornado Cash cannot be classified as a financial institution, and since the protocol became immutable in May 2020—months before the alleged conspiracy started—there was no possibility for an illegal agreement to commit money laundering.
The case against Storm and his co-founders has drawn significant attention, particularly after the U.S. government accused them of facilitating over $1 billion in crypto laundering, including transactions linked to the Lazarus Group. While Semenov remains at large, another co-founder Alexey Pertsev is currently in pre-trial detention in the Netherlands, facing related charges.
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