Tornado Cash Developer Storm Faces Trial Over $1 Billion in Hacked Funds

Victims of hacks and scams involving Tornado Cash received minimal assistance from the protocol’s developers in recovering their stolen funds, according to testimony given during the second day of Roman Storm’s criminal money laundering trial. Prosecutors argued that Storm, the developer of Tornado Cash, did not take any action to prevent the criminal use of the protocol. In contrast, Storm’s defense team claimed that the decentralized nature of the protocol limited his ability to assist victims.

One of the victims, a Georgia woman who lost nearly $250,000 to a pig butchering scam, reported that her request for help from Tornado Cash went unanswered. Another witness, a lawyer for the crypto exchange BitMart, which was hacked for nearly $200 million in 2021, stated that Storm informed his team that there was nothing he or his fellow developers could do to retrieve the funds due to the decentralized nature of the protocol.

A third witness, Andy Ho, the CTO and co-founder of Sky Mavis, the company behind the blockchain game Axie Infinity and the Ronin Network, detailed how hackers stole over $625 million in an exploit of Ronin Bridge in 2022. Ho’s testimony revealed that the Lazarus Group, a North Korean state-sponsored hacking organization, used Tornado Cash to launder a portion of the stolen funds.

Prosecutors attempted to portray Storm as someone who refused to help hack victims or make changes to the Tornado Cash protocol to prevent future criminal use. Storm’s lawyers, however, argued that his lack of action was due to the decentralized nature of the protocol, which made it impossible for him to retrieve the funds. Storm himself communicated this to BitMart’s lawyer, Joseph Evans, in an email on December 15, 2021.

Evans also admitted that BitMart’s hacked funds were laundered through multiple platforms, not just Tornado Cash. These platforms included 1inch, a decentralized exchange aggregator, Cloudflare, and Binance. Evans stated that he received no response from Cloudflare and Binance.

Brian Klein, a lawyer for Roman Storm, questioned Evans about the responses he received from various companies after the BitMart hack. Evans confirmed that Storm was the only person who had directly responded to his inquiries. Storm’s defense team also questioned Ho about the findings presented to Sky Mavis by Crowdstrike, which indicated that the stolen funds had been laundered through various protocols and exchanges, including FTX, Huobi, and Crypto.com. Ho, however, did not recall these details and stated that he did not have knowledge of whether the $6 million recovered by Norwegian police had gone through Tornado Cash.