DOJ Upholds Charges Against Tornado Cash Developer Amid Crypto Policy Shifts

By: Isha Das

The United States Department of Justice (DOJ) has confirmed its decision to proceed with federal criminal charges against Roman Storm, co-founder and developer of Tornado Cash, a renowned Ethereum-based coin mixing service. Despite hints of a policy shift towards a more lenient stance on crypto mixing services, the DOJ has decided to hold Storm accountable on charges including money laundering and sanction evasion. These charges reflect ongoing tensions between federal regulations and the development of decentralized software products designed for privacy.

Tornado Cash, designed to obfuscate the origin and destination of cryptocurrency transactions, has been the center of significant legal scrutiny. The DOJ's pursuit of Storm continues even after the Department acknowledged a portion of the charge regarding running an unlicensed money transmitting business was inconsistent with federal guidelines. However, Roman Storm's upcoming trial in a Manhattan federal courtroom still includes serious accusations of money laundering and sanctions evasion, depicting the government's intent to crack down on illegal use of blockchain technology.

The case against Storm comes despite a recently leaked DOJ memo suggesting a priority shift towards targeting individuals misusing crypto tools criminally versus prosecuting the platforms at large. This change in tactic was initially interpreted as part of a broader evolution in policy, possibly influenced by the Trump administration's more amicable crypto stance. Meanwhile, Storm's supporters in the tech community, including prominent figures such as Ethereum co-founder Vitalik Buterin, affirm his innocence, arguing that developers of privacy-focused tools should not bear culpability for illicit uses of their creations.

The US Treasury previously sanctioned Tornado Cash in 2022 following accusations that the service facilitated over $7 billion in illicit transactions. Nevertheless, the Office of Foreign Assets Control later removed Tornado Cash from its sanctions list after a federal court ruling that smart contracts could not be sanctioned as property. As the trial approaches, the crypto community scrutinizes how the case will impact the legal treatment of tech developers who promote privacy and decentralization through their platforms.