District Judge Katherine Polk Failla’s ruling in favor of a trial against Tornado Cash and Roman Storm has sparked controversy within the crypto community. The decision to deny the defendants’ motion to dismiss was based on the assertion that the potential uses of code were not protected as speech under the First Amendment. Arguments claiming that the crypto mixer operated differently from traditional money-transmitting businesses were also dismissed in the Southern District of New York.
The response from the general crypto caucus was one of outrage, with many expressing concerns about the implications of the court’s decision on open-source development and developer freedom. Prominent crypto lawyer, Variant CLO Jake Chervinsky, described Tornado Cash and Roman Storm as being at the forefront of a battle for free speech in America. He warned that the precedent set by this case could have far-reaching consequences for other code-based sectors, such as artificial intelligence.
Chervinsky’s remarks highlighted the lack of engagement from non-crypto civil rights groups in the case, emphasizing the importance of the issues at stake. Despite Judge Failla’s insistence that the crackdown on sanction evasion and money laundering was not a form of government-sponsored censorship, the charges against Tornado Cash and Roman Storm paint a different picture.
The indictment against Storm and his co-founders in August 2023 accused them of conspiracy and illegal money-transmitting, alleging that they built the crypto mixer with the intention of facilitating criminal activity. Federal prosecutors claimed that Tornado Cash had enabled over $1 billion in illicit funds to be laundered. The tool, operating on Ethereum’s blockchain, allowed users to obscure their transactions, attracting the attention of criminal elements like the North Korean hacking group Lazarus.
While Storm and the crypto community argue that developers should not be held responsible for the functionality of their code, the court disagreed with this stance. The upcoming trial, scheduled to begin on December 2, is expected to last around two weeks. In a related case, Tornado Cash developer Alexey Pertsev was recently found guilty in a Dutch court for his involvement in building the crypto tumbler.
As the legal battles continue, the crypto community remains vocal in their support for Tornado Cash and its developers, rallying behind slogans like “code is not a crime.” The outcome of these cases could have significant implications for the future of code development and innovation in the cryptocurrency space.