Roman Storm Faces Bankman-Fried's Prosecutor as Tornado Cash Trial Begins

Prosecutors allege he conspired to launder money, violated US sanctions and operated an unlicensed money-transmitting business. Storm’s open-source protocol, which he created in 2019, enables users to obscure blockchain transactions by using secret codes to withdraw crypto from different wallet addresses.

The decentralized nature of Tornado Cash quickly attracted nefarious actors, including North Korean hackers. At the heart of the case is whether Storm should be held accountable for the illegal activities of users on his protocol.

This trial has the potential to set a pivotal precedent for decentralized finance, holding developers accountable for how their code is used.

Day one

Storm’s first day in court began with jury selection and technical wrangling between attorneys over whether private messages and photos are “business records.”

Prosecutors argue that certain messages Storm received indicate he knew the scale of illegal activity on Tornado Cash and failed to act. Storm’s attorneys argue that these messages are cherry picked and taken out of context.

He is represented by Brian Klein and David Patton, prominent defence attorneys known for high-profile crypto cases involving figures such as Avi Eisenberg, Do Kwon and Kraken.

Storm is being prosecuted by seasoned crypto-crime specialists Thane Rehn and Benjamin Gianforti, assistant US attorneys in the Southern District of New York. Gianforti led successful prosecutions in the IcomTech and Forcount crypto Ponzi schemes, while Rehn notably handled the case against the failed exchange FTX founded by Sam Bankman-Fried.

Bankman-Fried, or SBF, was sentenced to 25 years in prison and ordered to pay $11 billion in forfeiture for his orchestration of multiple fraudulent schemes, cementing his place in crypto's chequered folklore.

What’s at stake

The defence argues that Storm simply wrote and published open-source code. He did not operate a business, provide a service, or manage any customers.

In court filings, they cite guidance from the Financial Crimes Enforcement Network, a bureau within the Department of Treasury. Specifically, the defence notes Sec. 4.5.1 (b): “An anonymizing software provider is not a money transmitter. FinCEN regulations exempt from the definition of money transmitter those persons providing 'the delivery, communication, or network access services used by a money transmitter to support money transmission services.'”

The trial is expected to last three to four weeks. The outcome could have significant ramifications for the future of open-source development and decentralized finance. A conviction may chill innovation for fear of accountability, while an acquittal could reaffirm the principle that publishing code alone is not a crime.