Crypto Lobby Group Urges Trump to Halt Prosecution of Tornado Cash Co-Founder

The DeFi Education Fund, a prominent crypto lobby group, has petitioned the Trump administration to halt the prosecution of open-source software developers, with a particular focus on Roman Storm, the co-founder of the crypto mixing service Tornado Cash. In a letter dated April 28, addressed to White House crypto czar David Sacks, the group urged President Donald Trump to intervene and discontinue the Department of Justice's campaign to criminalize open-source software development, which they deemed "lawless."

The letter highlighted the case of Roman Storm, who was charged in August 2023 with assisting in the laundering of over $1 billion in crypto through Tornado Cash. Storm's trial is scheduled for July, while his co-founder, Roman Semenov, remains at large and is believed to be in Russia. The DeFi Education Fund argued that the Department of Justice's attempt to hold software developers criminally liable for the actions of others using their code is not only absurd but also sets a dangerous precedent that could stifle crypto development in the United States.

The group also pointed out that the prosecution contradicts the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) guidance from Trump’s first term. This guidance established that developers of self-custodial, peer-to-peer protocols are not money transmitters. The DeFi Education Fund emphasized that such a legal environment not only chills innovation but also empowers politically-motivated enforcement, putting every open-source developer at risk.

In January, a federal court in Texas ruled that the Treasury overstepped its authority by sanctioning Tornado Cash, adding weight to the arguments presented by the DeFi Education Fund. The group thanked Trump for his support of the industry and his goal to make America the "crypto capital of the planet." However, they argued that this goal cannot be achieved if developers are prosecuted for building tools that enable the technology.

The petition has garnered significant support, with 232 signatures from industry executives and developers, including prominent figures such as Coinbase co-founder Fred Ehrsam, Paradigm co-founder Matt Huang, and Ethereum core developer Tim Beiko. Variant Fund chief legal officer Jake Chervinsky described the Justice Department’s case against Storm as "an outdated remnant of the Biden administration's war on crypto," stating that there is no legal or policy justification for prosecuting software developers for launching non-custodial smart contract protocols.

The stakes are high, as the outcome of this case could set a precedent for future prosecutions of open-source developers. The DeFi Education Fund's petition calls for the protection of American software developers, the restoration of legal clarity, and an end to what they perceive as unlawful overreach by the Department of Justice. The group's arguments underscore the broader implications of the case, highlighting the potential chilling effect on innovation and the need for clear legal guidelines to support the growth of the crypto industry.