Ethereum News Today: Defense Seeks Mistrial as FBI Fails to Link Stolen Funds to Tornado Cash

Roman Storm’s defense team has raised the possibility of a mistrial after an FBI agent failed to confirm that the stolen assets from the prosecution’s first witness in his trial had passed through Tornado Cash. This development occurred during the trial on July 21, where the defense argued that the lack of a verifiable on-chain link between the stolen funds and Tornado Cash could prejudice the jury.

Katie Lin, the prosecution’s first witness, testified that she lost her life savings to a pig-butchering scheme and believed the proceeds moved through the crypto mixer Tornado Cash, which Storm co-created. However, the FBI agent responsible for tracking the funds was unable to follow the funds to Tornado Cash, casting doubt on Lin’s account. Defense attorney Brian Patton argued that if prosecutors cannot prove Tornado Cash handled her coins, Lin’s account may be inadmissible.

Patton further argued in front of US District Judge Katherine Polk Failla that presenting sympathetic testimony without a verifiable on-chain link “prejudices the jury” and suggested the deficiency could warrant a mistrial. Prosecutors stated that a second tracing expert will address the transfers later in the trial, but they did not indicate whether the witness would appear in person or submit a written analysis.

The dispute arose after MetaMask security lead Taylor Monahan published a thread on July 18, in which she shared her review of Lin’s transactions. Monahan wrote that the $250,000 wired to a fake trading site called NTU Capital never touched Tornado Cash or Coinbase. Instead, the scammer swapped Bitcoin for Ethereum (ETH) via an instant-exchange service, then moved the ETH among self-controlled wallets. She posted Dune Analytics queries and federal asset-seizure filings that list the addresses, contending that an outside “crypto recovery” firm misidentified Tornado Cash in 2022 when advising Lin.

Judge Failla allowed Patton to confer with Storm regarding the mistrial, which would leave prosecutors to decide whether to retry Storm on sanctions-violation and money laundering counts stemming from the Treasury’s 2022 designation of Tornado Cash as a facilitator of illicit fund flows. For now, proceedings hinge on whether the forthcoming expert can verify a Tornado Cash link that the FBI’s analyst could not establish.

This development highlights the complexities involved in tracing cryptocurrency transactions and the potential challenges faced by prosecutors in building a case against individuals involved in crypto-related activities. The outcome of the trial will depend on the ability of the prosecution to provide concrete evidence linking the stolen funds to Tornado Cash, a task that has proven difficult thus far. The defense’s argument for a mistrial underscores the importance of verifiable on-chain links in crypto-related legal proceedings, as the lack of such evidence can significantly impact the jury’s perception of the case.