Roman Storm, one of the developers of crypto anonymizing tool Tornado Cash, has been found guilty of conspiracy to operate an unlicensed money transmitting business by a jury in a court in New York. He faces a maximum sentence of five years in federal prison.
In 2023, the US Department of Justice charged Storm with three violations: conspiracy to commit money laundering, conspiracy to violate sanctions, and conspiracy to operate an unlicensed money transmitting business.
On Wednesday, at the end of a four-week trial and a deliberation period spanning five days, the jury returned a partial verdict: It found Storm guilty of operating an unlicensed money transmitting business, and not guilty of sanctions evasion. It failed to reach a unanimous verdict on the money laundering count, which carries a far greater penalty of up to 20 years in prison.
“We are grateful the jury did not convict Roman for violating sanctions or laundering money. There are serious legal issues with the sole remaining count involving unlicensed money transmission,” says Brian Klein, partner at law firm Waymaker, one of Storm’s representatives at trial. “We will not stop fighting for Roman and expect him to be fully vindicated.”
Storm intends to file for the single conviction to be dismissed in a post-trial motion, his counsel tells WIRED.
Tornado Cash was developed in 2019 by Storm and two others, Alexey Pertsev and Roman Semenov. The idea was to conceal the ownership of crypto coins, by pooling funds belonging to various different parties, then dishing them into brand-new wallets, thereby interrupting the public trail of transactions recorded on a blockchain.
Services like Tornado Cash are marketed as essential to improving the level of privacy available to crypto owners. Privacy has long been a preoccupation among crypto ideologues, but the issue is especially pertinent at present, after a string of violent kidnappings targeting people known to possess large amounts of crypto.
“Privacy is a very pragmatic thing for basic safety,” Vitalik Buterin, co-creator of the Ethereum crypto network, told WIRED before the start of the trial. “If someone knows who has the coins, someone knows who to target.”
But the US government saw Tornado Cash differently—as a tailor-made vehicle for money laundering. When it brought charges in 2023, the DOJ argued that Storm had built and profited from a tool that allowed criminals to launder at least $1 billion in crypto, among them hackers with ties to North Korea.
“Claiming to offer the Tornado Cash service as a ‘privacy service,’ the defendants in fact knew that it was a haven for criminals to engage in large-scale money laundering and sanctions evasion,” the indictment alleged.
At trial, prosecutors presented evidence that they claimed proved that Tornado Cash was designed for money laundering from the outset. Their witnesses included a scam victim whose stolen funds were said to have passed through Tornado Cash—though this account was contested online by prominent members of the crypto industry—and a convicted fraudster who used the service to launder ill-gotten gains. “Washy, washy,” the fraudster supposedly wrote to his girlfriend, in a message about Tornado Cash.
Great Job Joel Khalili & the Team @ WIRED Source link for sharing this story.
