Roman Storm Seeks $1.5M for Tornado Cash Legal Defense as Trial Sets Crypto Privacy Precedent

Roman Storm, co-creator of the Tornado Cash crypto mixing protocol, has issued an urgent call for an additional $1.5 million to sustain his legal defense as his trial progresses in the Southern District of New York [1]. The trial, which began on July 14, has drawn significant attention for its potential to set a legal precedent for regulating open-source privacy tools in the cryptocurrency industry. Storm’s legal team emphasized the urgency of the request, stating that “every hour counts” as costs escalate amid around-the-clock workloads. As of July 26, the crypto community had already raised $3.9 million for his defense, with 65% of a new $5 million fundraising goal already secured [1].

The Tornado Cash protocol, which allows users to anonymize cryptocurrency transactions, was sanctioned by the U.S. Treasury’s Office of Foreign Assets Control (OFAC) in August 2022 due to its alleged misuse by illicit actors, including the North Korean-backed Lazarus Group. However, those sanctions were temporarily lifted in January 2023 after a civil lawsuit by Tornado Cash users challenged the OFAC action. The protocol was officially removed from the sanctions list in March 2023, but the criminal case against Storm and other developers remains unresolved [1].

U.S. prosecutors allege that Storm conspired to launder money, violated U.S. sanctions, and operated an unlicensed money-transmitting business through his role in developing Tornado Cash [1]. Storm’s legal team, however, argues that the protocol is decentralized and immutable, and thus not a business. They rely on a 2019 Financial Crimes Enforcement Network (FinCEN) guidance that exempted developers of anonymizing software from money transmitter registration requirements. Additionally, the defense asserts that code writing and publication are protected under the First Amendment as free speech [1].

The outcome of the trial, expected to conclude by August 11, could reshape the legal landscape for decentralized finance (DeFi) and privacy technologies. A conviction might deter innovation in privacy-preserving protocols, while a defense victory could reinforce the rights of developers to create and distribute open-source code without criminal liability [1]. The case also raises broader questions about the balance between privacy rights and regulatory oversight in the digital economy.

Storm’s legal defense has received support from prominent entities, including the Ethereum Foundation, which reached its $750,000 funding goal to assist in the case [1]. The trial’s implications extend beyond Storm, as his co-creators, Alexey Pertsev and Roman Semenov, also face legal scrutiny. Pertsev was convicted of money laundering in the Netherlands in May 2024 and is appealing the verdict while under electronic monitoring. Semenov remains at large and is listed as a fugitive by the FBI [1].

The case highlights the complexities of regulating decentralized technologies, where developers often lack control over how their tools are used. The prosecution’s arguments, if upheld, could signal a shift toward criminalizing open-source tools for third-party misuse, potentially stifling innovation in DeFi. Conversely, a defense win could reinforce the principle that code development is protected speech, preserving the foundation of decentralized innovation [1].

Source: [1] [Roman Storm asks more donations Tornado Cash case] [https://cointelegraph.com/news/roman-storm-asks-more-donations-tornado-cash-case]