Judge May Exclude 2022 Tornado Cash Sanctions From Storm Trial

The judge overseeing the US criminal trial of Tornado Cash co-founder and developer Roman Storm has indicated that she may disallow any mention of the 2022 sanctions against the cryptocurrency mixing service in court. Judge Katherine Failla of the US District Court of the Southern District of New York expressed her inclination to exclude the sanctions, which were later withdrawn, from the proceedings. This decision comes as part of the ongoing legal battle surrounding Storm's involvement with Tornado Cash, a service that allows users to deposit funds anonymously, making it difficult to trace the origin and destination of transactions.

Judge Failla's ruling on the sanctions is significant because it addresses the broader implications of Tornado Cash's operations. The sanctions in question were imposed by the US Treasury’s Office of Foreign Assets Control (OFAC) in 2022, adding addresses connected to Tornado Cash to its list of Specially Designated Nationals. However, these sanctions were later repealed following a federal judge's order in a civil case filed by Tornado Cash users. Failla's decision to potentially exclude these sanctions from the trial reflects her view that Storm should not be held accountable for actions he was not ultimately guilty of, as the sanctions were withdrawn.

Storm faces serious charges, including money laundering, conspiracy to operate an unlicensed money transmitter, and conspiracy to violate US sanctions. These charges have sparked significant debate within the crypto and blockchain industry, with many high-profile figures calling for the charges to be dropped. The Ethereum Foundation, Ethereum co-founder Vitalik Buterin, and Paradigm founder Matt Huang have contributed to Storm's legal fund, echoing the sentiment that "writing code is not a crime."

The potential exclusion of the Tornado Cash sanctions from the trial could have a profound impact on the case. By focusing the trial on Storm's individual actions rather than the broader implications of Tornado Cash's operations, the judge aims to create a more impartial jury. This approach could influence the jury's perception of the case, as they would be less likely to associate Storm with the controversial aspects of Tornado Cash. The judge's decision to question jurors about their understanding of cryptocurrencies and decentralized finance (DeFi) further highlights the complexity of the case and the need for an informed jury.

The trial's delay until February 2026 provides ample time for both the prosecution and the defense to prepare their arguments. This extended period allows for a thorough examination of the evidence and the development of a comprehensive legal strategy. The delay could also benefit Storm, as it gives him more time to build a strong defense and potentially negotiate a plea deal if necessary. The judge's request to question jurors about cryptocurrencies and DeFi highlights the complexity of the case and the need for an informed jury. By ensuring that jurors have a basic understanding of these technologies, the judge aims to create a more impartial and informed jury, which is crucial in a case involving advanced financial technologies.