Tornado Cash developer’s bid to dismiss charges fails, NY judge sets trial for December

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A US federal judge has denied Tornado Cash developer Roman Storm’s bid to dismiss money laundering and sanctions evasion charges, clearing the way for a trial to begin on December 2 in New York.

Judge Katherine Failla of the Southern District of New York rejected Storm’s argument that the creation and implementation of the Tornado Cash protocol was protected speech under the First Amendment. The judge expressed skepticism about that claim, stating that while computer coding can be expressive conduct, using code to direct a computer to perform functions is not protected speech.

Tornado Cash is a cryptographic mixer protocol on Ethereum that hides transaction streams. Although popular among privacy-conscious users, prosecutors say it has become a tool for cybercriminals, including North Korean hackers, to launder stolen tokens. Storm faces charges of conspiracy to launder money, operating an unlicensed money transmission business and evading US sanctions. Proponents of these two protocols include Vitalik Buterin, who advocated the creation of a compliant version, and Edward Snowden, who argued that privacy is not a crime as he solicited donations for Tornado Cash’s legal defense.

The judge rejected Storm’s other arguments for dismissing the case, including the claim that Tornado Cash was an “immutable” protocol that it could not control. Judge Failla stated that control is not a necessary requirement for operating a money transmitting business. She also noted that Tornado Cash was “not significantly different” from other crypto-mixers previously recognized as money-transmitting businesses in court cases.

“Control is not a necessary requirement,” Failla said, adding that even if control was relevant, it was “not significantly different,” particularly among crypto mixers recognized as money-transmitting businesses, citing previous court cases.

Industry lawyers expressed disappointment at the ruling. Amanda Tuminelli, chief legal officer at the DeFi Education Fund, said they hoped the judge would reject the government’s “novel theory of developer liability.” Jake Chervinsky, chief legal officer at crypto venture fund Variant, called the decision “an attack on the freedom of software developers everywhere.”

In April, the DOJ argued in a 111-page court filing that Tornado Cash operated as a commercial enterprise. A month later, Senators Ron Wyden and Cynthia Lummis argued against what they considered to be an unprecedented interpretation of the Tornado Cash and Samourai Wallet cases.

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