DOJ Counters Tornado Cash Developer’s Motion To Dismiss – Details

The US Department of Justice has released a rebuttal to Tornado Cash developer Roman Storm’s motion to dismiss the criminal charges levied against him by the government. In a filing submitted on Friday, the DOJ rebuffed several arguments made by the defendant’s lawyers while nudging the court to ensure the case undergoes a proper trial.

DOJ Fires Back At Roman Storm

On August 23, the DOJ announced an indictment against Storm and fellow Tornado Cash co-founder Roman Semenwov for their role in the “creation, operation, and promotion” of the popular crypto mixer platform. The US prosecutors charged both parties with conspiracies to commit money laundering, breach the International Economic Emergency Powers Act (IEEPA), and operate an unlicensed money-transmitting business. 

In response to such accusations, Storm, who is currently in the custody of US authorities, filed a motion to dismiss on March 29. One of the defendant’s arguments stated that Tornado Cash could not be classified as a money-transmitting business as the platform does not acquire control of users’ funds at any point.

However, the DOJ has rebuffed this argument stating a money-transmitting business does not necessarily have to exhibit control user funds according to guidelines of the Financial Crime Enforcement Network (FinCEN) and Section 1960 of the US Constitution. The plaintiff states that according to FinCEN, money transmitters in the crypto space are platforms that ensure the transfer of value between two customers while maintaining their anonymity. 

In addition, the US prosecutors also highlighted that Storm and his fellow developers maintained control over certain user transactions on Tornado Cash between August 2019 to March 2022, which is the timeframe referenced in the indictment. This statement counters Storm’s earlier claim that developers had little influence on users’ actions on the mixer.

A statement from the petition read: 

… the Tornado Cash founders personally approved each individual relayer who was authorized to process withdrawals and maintained a list of these relayers. Later, in or about February and March 2022, they designed
and deployed a “relayer algorithm,” which used a formula to assign relayers to particular customer withdrawals.

 

Legal Battle Over Tornado Cash Intensifies

The DOJ’s latest petition represents a new twist to what could be a crucial lawsuit for web3 developers.

While the DOJ has built an argument on the access of Tornado Cash to sanctioned parties such as the North Korea Lazarus hackers group, the attempt by the US prosecutors to hold the developers responsible for the use of their platform has stirred many emotions in the crypto community.

These concerns have so far translated into three pro-crypto organizations each filing an amicus brief in support of the defendants. In clear trams, this is a pivotal case capable of setting a precedent in US crypto. 

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