Tornado Cash Developer's Defense Accuses U.S. of Withholding Evidence

The defense team of Roman Storm, the developer of Tornado Cash, has accused the U.S. federal government of withholding key exculpatory evidence that could potentially exonerate Storm in his ongoing criminal trial. In a letter addressed to U.S. District Judge Katherine Polk Failla, Storm's legal representatives asserted that the government has been in possession of crucial evidence since August 2023, which could significantly impact the outcome of the trial.

The defense team argues that the government's classification of Tornado Cash as a "money-transmitting business" contradicts an August 2023 statement by FinCEN officials. In that statement, FinCEN officials indicated that Samourai Wallet, another non-custodial cryptocurrency mixer, does not qualify as a money transmitter due to its non-custodial nature. Given that Tornado Cash shares the same non-custodial characteristics, Storm's legal team contends that the government's indictment of Storm is inconsistent with its own stance on non-custodial mixers.

The defense team's letter to the judge highlights the discrepancy, stating, "The disclosures in the Samourai case reveal that the government, at the very least, played fast and loose and, at worst, affirmatively misled this court." This accusation suggests that the government has not been transparent in its handling of the evidence, potentially compromising the fairness of the trial.

In response to these allegations, U.S. prosecutors have defended their position, asserting that they have disclosed all relevant communications between the prosecution team and FinCEN regarding Samourai Wallet well in advance of the trial. They maintain that the defense team has had ample time to review and utilize this information, and that no further action is warranted. The prosecutors' stance is that the defense has had sufficient time to prepare and that the trial should proceed as scheduled.

The Tornado Cash case is unfolding against a backdrop of evolving crypto regulations in the United States. Recent policy shifts, including a memorandum from the Deputy Attorney General’s Office, indicate a relaxation of rulemaking on the blockchain sector. This memorandum, released on April 7, states that the government will no longer target virtual currency exchanges, mixing and tumbling services, and offline wallets for the acts of their end users or unwitting violations of regulations. This policy change could have implications for the ongoing legal battle surrounding Tornado Cash and its developer, Roman Storm.