Bitcoin News Today: Tornado Cash Co-Founder Faces Mistrial Bid Over Disputed Testimony

Tornado Cash co-founder Roman Storm’s legal team is contemplating a mistrial due to the testimony of a government witness, which they argue is not connected to the crypto mixer case. This potential request was brought up before Manhattan federal judge Katherine Polk Failla on Monday, questioning the validity of the testimony provided by government witness Hanfeng Lin.

If a mistrial is granted, the current proceedings would be invalidated, potentially leading to the dismissal of the case or requiring a retrial with a new judge and jury. Storm was charged in 2023 with money laundering conspiracy, conspiracy to violate U.S. sanctions, and operating an unlicensed money-transmitting business. He faces up to 45 years in prison. His co-founder, Roman Semenov, who is charged in the same case, remains in Russia and has not appeared in court.

Lin testified that she lost $190,000 in a crypto romance scam that began on WhatsApp in 2022. She described how a scammer convinced her to purchase Bitcoin and send it to a fraudulent trading platform that falsely displayed high returns, prompting her to send more funds. Eventually, the scammer disappeared with the funds. Lin said that Payback, a crypto recovery service she hired, informed her that some of her stolen Bitcoin had passed through Tornado Cash.

However, Storm’s lawyer, David Patton, stated that their research over the weekend could not find any evidence linking Lin’s funds to Tornado Cash, indicating the defense would consider moving for a mistrial due to this testimony. FBI Special Agent Joseph DeCapua, a government crypto tracing expert, testified regarding the general flow of crypto from hacks into Tornado Cash but confirmed under cross-examination that he had not reviewed Lin’s transactions specifically. The prosecution indicated it would bring in IRS analyst Stephan George to prove Lin’s funds touched Tornado Cash.

Independent blockchain researchers have cast doubt on Lin’s claims. MetaMask security researcher Taylor Monahan posted on X that her analysis showed the scammers who stole Lin’s funds did not use Tornado Cash. She explained that the scammers converted Lin’s Bitcoin to Ether, and the transactions were mistakenly flagged by Payback due to bundling errors onchain. Prominent blockchain investigator ZachXBT supported Monahan’s findings, criticizing Payback’s tracing work, noting that the firm had followed incorrect transaction paths, leading to an inaccurate claim that Lin’s funds interacted with Tornado Cash.

The defense's strategy hinges on the argument that the witness's testimony is misleading and does not support the prosecution's claims. They assert that the witness's inability to trace funds stolen from the scam to Tornado Cash undermines the prosecution's narrative. This line of reasoning has led Storm's legal team to consider calling for a mistrial, a move that could significantly alter the course of the trial.

The potential mistrial comes at a critical juncture in the case, with the prosecution's case set to conclude soon. The defense's decision to seek a mistrial could be a pivotal moment, potentially leading to a dismissal of charges or a retrial. The outcome of this legal maneuver will have significant implications for the future of Tornado Cash and the broader crypto community.