Former SEC Chair Jay Clayton leads trial of Tornado Cash co-founder Roman Storm

Jay Clayton, the former chair of the Securities and Exchange Commission (SEC) under the first Trump administration, is now overseeing the trial of Roman Storm, the co-founder of the popular coin mixing service Tornado Cash. The trial is set to begin on Monday in New York, where Storm faces charges of criminal conspiracy to commit money laundering and evading U.S. sanctions.

Clayton's involvement in the crypto industry has been complex. During his tenure at the SEC, he initiated several high-profile lawsuits against major crypto firms, including a $1.3 billion suit against Ripple in late 2020. This suit alleged that Ripple illegally offered unregistered securities when selling XRP. Clayton brought a total of 57 cases against crypto firms, ICOs, and other blockchain-based projects during his time at the SEC.

After leaving the SEC, Clayton returned to practicing law at Sullivan & Cromwell and joined the advisory board of Fireblocks, a crypto custody provider. In April, he was appointed interim U.S. Attorney for the Southern District of New York by President Trump, a position that oversees some of the Department of Justice’s most high-profile criminal prosecutions.

Despite the Treasury Department dropping its case against Tornado Cash earlier this week and the Department of Justice pledging to back off intermediary services offering similar privacy-focused “coin mixing” services, the Trump administration has continued to pursue charges against Storm. This has raised concerns among DeFi and privacy advocates, who worry that a successful prosecution of Storm could set a harmful precedent for targeting software developers and potentially destroy the American DeFi industry.

DeFi, or decentralized finance, refers to a subset of crypto applications that enable the permissionless and non-custodial trading of digital assets. Many notable crypto assets initially trade on DeFi applications run on native blockchain networks before hitting major exchanges. Storm has framed the potential outcome of his trial as critical to the future of DeFi, stating, “If I lose, DeFi dies with me.”

Under Clayton’s leadership, the Trump DOJ’s SDNY office has continued to push ahead with its case against Storm. Clayton’s name has appeared on several pre-trial motions filed by the Department of Justice, which have in some cases successfully prevented certain pro-crypto legal precedents from being discussed at trial. However, a source familiar with the SDNY’s operations noted that motions filed by the office’s prosecutors are generally signed by the U.S. Attorney, who oversees all cases in the district but does not handle matters of day-to-day litigation.

The trial will be presided over by Judge Katherine Failla, who previously oversaw the SEC’s lawsuit against Coinbase. The case against Storm is significant not only for its potential impact on the DeFi industry but also for the broader implications it may have on the regulation and prosecution of crypto-related activities in the United States.