Advocacy groups warn of ‘negative effects’ on crypto against Tornado Cash co-founder
Representatives of three US-based privacy advocacy organizations have filed amicus briefs in support of a motion to dismiss the lawsuit against Tornado Cash co-founder Roman Storm.
In the US District Court for the Southern District of New York on April 5, the Blockchain Association, the Coin Center and the Diffie Education Fund argued that Tornado Cash should not monitor users' funds or messages sent through the cryptocurrency mixer. Advocacy groups have argued that the three criminal charges against Roman should be dismissed for allegedly violating sanctions against the Tornado Cash co-founder and cited First Amendment issues, citing the US government's “incomprehension.”[ing] The fundamental relationship between smart contract protocols and their developers” regarding money laundering allegations.
Marisa Koppel of the Blockchain Association of Legal said: “The government's adoption of the legal concept will not only have negative effects on the digital asset industry, but also raise concerns about fintech in general.” “We urge the court to hold the government to its burden and to protect the rights of the accused and the integrity of the growing digital assets sector to dismiss the baseless allegations.”
The US Department of Justice announced in August 2023 that it was indicting Storm and co-developer Roman Semenov. Storm has pleaded not guilty to all three charges and is free on a $2 million bond, restricting him from traveling for the most part. Semenov's whereabouts are unknown at the time of publication, but Storm is due to stand trial in September.
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In the Netherlands, Tornado Cash developer Alexey Persev was arrested in August 2022 but released after nine months in prison. Dutch authorities have used CryptoMixker to launder nearly $1 billion in illicit funds and play a role in North Korean hacking groups.
All three cases are related to the US Treasury's Office of Foreign Assets Control placing crypto addresses linked to Tornado Cash on a list of specially designated nationals – sanctioned entities. The decision prompted some crypto advocates to file a lawsuit against the US Treasury, but both cases await appeals after losing summary judgments.
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