Golden Finance reports that in the case of Tornado Cash developer Roman Storm, the federal judge in charge of the case made a key decision. On May 30 local time, after a hearing process, the federal judge refused to order the US Department of Justice (DOJ) to review the case records to look for materials that might be beneficial to Storm’s defense team.
Roman Storm, as the developer of Tornado Cash, Tornado Cash is an open-source, non-custodian, and fully decentralized cryptocurrency mixer that runs on the Ethereum Virtual Machine compatible network. The services it provides can mix potentially identifiable or “contaminated” cryptocurrency funds with other funds, thereby blurring the path for funds to trace back to their original sources. In the Ethereum virtual Machine network, where all transactions are made public by default, it is an important privacy protection tool. However, due to its special functions, it is also regarded by the US government as a project with money laundering risks.
In August 2022, the US Treasury Department blacklisted Tornado Cash, making it illegal for US citizens, residents and companies to use the agreement. Meanwhile, the website domain name and GitHub account of the project were shut down, and one of its developers was also arrested. Roman Storm, on the other hand, was accused of money laundering and violating sanctions for collaborating with a privacy mixer. The US Department of Justice claimed that he “assisted in money laundering of over $1 billion”, including “hundreds of millions of dollars” of money laundering activities involving the North Korean Lazarus Group. Subsequently, Storm was arrested.
The judge’s refusal to ask the Ministry of Justice to review the case records this time involves complex considerations at the legal level. The judge said that she believed the Department of Justice had not violated the “Brady Rules”. The “Brady Rule” clearly stipulates that the prosecution is obligated to disclose to the defense evidence that may mitigate the defendant’s guilt. In this case, the judge pointed out that the communication between the Department of Justice and the Financial Crimes Enforcement Network (FinCEN) regarding whether coin mixers need to be registered as currency service businesses does not apply to the Roman Storm case. This issue emerged in the Samourai Wallet case, but the prosecution in the Storm case was not involved in the relevant discussions.
For Roman Storm and his defense team, the judge’s decision this time undoubtedly increased the difficulty of the case defense. Originally, it was expected to obtain key materials that might be beneficial to the defense through the review of case records by the Ministry of Justice. Now, this approach has been blocked. Currently, Storm and his defense team are preparing for the trial scheduled for July 2025. According to legal requirements, the prosecution is required to share all the information that may be helpful for the defendant’s defense with the defendant. However, the judge’s decision this time has made Storm’s defense team face greater challenges in obtaining relevant information.
From the perspective of the cryptocurrency industry as a whole, the Roman Storm case has always attracted much attention. With the rapid development of the cryptocurrency industry, the balance issue between privacy protection and compliance for mixed-currency projects like Tornado Cash has become the focus of controversy among regulatory agencies and industry practitioners. Previously, the US Department of Justice has been frequently involved in the regulation of cryptocurrencies, and its policy direction has been constantly adjusted.
Last month, the Department of Justice issued a memo indicating that in most cases, it would no longer file lawsuits against entities such as cryptocurrency hybrid services and exchanges, but would focus on tracking down lawbreakers who use cryptocurrency services for money laundering rather than the platforms themselves. This policy shift has led the industry to pay more attention to the direction of the Roman Storm case, expecting to explore the trend of future cryptocurrency regulation from it.
However, this time the judge’s decision to refuse to order the Department of Justice to review the case records has added more uncertainties to the course of the case. Subsequently, the market will continue to pay attention to the trial progress of the Roman Storm case and its profound impact on the compliant development of the cryptocurrency industry.
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