Paradigm Backs Storm's Defense: Crypto Community Fights for Developer Rights

Paradigm, a prominent venture capital firm, has pledged $1.25 million to support the legal defense of Roman Storm, co-founder of Tornado Cash. Storm is facing up to 45 years in prison on charges including money laundering and sanctions evasion, which has sparked concerns about developer liability in the crypto community.

Matt Huang, co-founder of Paradigm, warned that the case against Storm could set a dangerous precedent for open-source development. "The prosecution’s case threatens to hold software developers criminally liable for the bad acts of third parties, which would have a chilling effect in crypto and beyond," Huang said in a tweet.

Storm's cause has also drawn support from the Electronic Frontier Foundation (EFF), which has filed an amicus brief in support of the developer. The EFF warned that Storm's prosecution could stifle privacy-focused software development. "Holding developers responsible for how their tools are used is an overreach," the EFF wrote in its brief.

The Tornado Cash prosecution began in August 2023 when the U.S. Department of Justice (DOJ) charged Storm and co-founder Roman Semenov with money laundering, sanctions violations, and operating an unlicensed money-transmitting business. Storm's trial is set for April 14, 2025, and the outcome could have far-reaching implications for financial privacy and software development.

The case comes amid shifting legal ground for Tornado Cash. In September 2023, a New York court denied Storm's motion to dismiss his charges, stating that while parts of Tornado Cash were immutable, other aspects remained under developer control. However, a Texas court recently overturned U.S. Treasury sanctions on the coin mixer, ruling that immutable smart contracts do not qualify as "property" under the International Emergency Economic Powers Act (IEEPA).

The crypto community, including Vitalik Buterin, has rallied behind Storm, arguing that prosecuting developers for code misuse threatens the future of decentralized finance and privacy-focused technologies. The outcome of Storm's case will be closely watched by the crypto community and the broader tech industry.