Tornado Cash Co-Founder Storm Faces Delay in Trial Over Controversial Witness

Attorneys for Roman Storm, co-founder of the cryptocurrency mixer Tornado Cash, have indicated that they may request a short delay to his upcoming criminal trial if a judge allows a controversial government witness to testify. The witness in question is described as “the claimed perpetrator of an alleged hack who allegedly used Tornado Cash.” Prosecutors identified this witness after a key disclosure deadline, leading Storm’s legal team to argue that their testimony could unfairly sway the jury.

The defense team filed a motion with the U.S. District Court for the Southern District of New York to exclude the witness, stating that their testimony would be unfairly prejudicial. They warned that it could mislead jurors into associating Storm with the hack, potentially evoking an angry response that would spill over to Storm. If the judge denies the motion, Storm’s lawyers reserve the right to request a brief continuance.

Storm’s trial is scheduled to begin with jury selection on Monday, nearly two years after his indictment on charges of money laundering, operating an unlicensed money transmitting business, and violating U.S. sanctions. A decision on the witness motions is expected by Friday. In a post on X last month, Storm expressed his frustration, stating, “SDNY is trying to crush me, blocking every expert witness. If I lose, DeFi dies with me.”

Prosecutors, however, argue that the unnamed witness is a victim in the case and that their testimony is relevant. Interim U.S. attorney Jay Clayton filed a response earlier this week pushing back on the defense’s attempts to limit the witness list. Storm was indicted in 2023 on charges of conspiracy to commit money laundering, operate an unlicensed money transmitter, and violate U.S. sanctions. The case followed the Treasury Department’s move to sanction Tornado Cash a year earlier, alleging it helped North Korea’s Lazarus Group launder hundreds of millions in stolen crypto.

Storm is one of three Tornado Cash developers named in the case. His co-founder Alexey Pertsev was convicted of money laundering in the Netherlands and sentenced to over five years in prison. The third co-founder, Roman Semenov, has not been apprehended and is believed to be in Russia. Since Storm’s indictment, prominent figures in the crypto space, including Ethereum co-founder Vitalik Buterin and investment firm Paradigm’s Matt Huang, have rallied to his defense, contributing to a legal fund that’s raised thousands of dollars.

The case against Storm underscores the complex legal and regulatory challenges facing the cryptocurrency industry. Tornado Cash, designed to enhance privacy and anonymity in cryptocurrency transactions, has sparked a debate over the balance between privacy and regulatory oversight. The sanctions imposed on the platform by the Office of Foreign Assets Control (OFAC) have raised questions about the extent to which regulators should monitor and control cryptocurrency transactions, and the potential impact on innovation and competition in the industry.

As the trial approaches, the legal battle is poised to have significant implications for the future of cryptocurrency regulation. The outcome of the case could set a precedent for how similar cases are handled, potentially influencing the broader cryptocurrency landscape. The courtroom drama will be closely watched as it unfolds, with the potential to shape the regulatory environment for cryptocurrencies in the years to come.