The founder of the famous Russian crypto mixer Tornado Cash has filed a motion in court demanding the dismissal of the criminal charges against him. Earlier, the regulators accused Roman Storm, the co-founder of Tornado Cash, of engaging in money laundering activities.
Mr Storm was accused of contravening the International Emergency Economic Powers Act, which restricted any financial transactions with the sanctioned countries.
Tornado Cash Developer Charged for Supporting Money Laundering
In a March 29 court filing, the lawyers representing Storm argued that by no chance could the crypto investor conspire to launder substantial amounts of funds. The lawyers argued that just like any other platform, the Tornado cash was developed to meet the customers needs.
After attaining the growth stage, the crypto mixer became publicly available to facilitate the transfer of digital assets. The lawyers lamented that the growing popularity of Tornado Cash enabled the notorious hacking groups to shift their focus on these crypto mixers to conduct their illicit financial transactions.
The legal team defending Storm argued that the increased use case of Tornado Cash prevented that troubled developer from barring the sanctioned states from using the platform.
At the primary development of the Tornado Cash Storm and, his business partner Roman Semenov planned to create a unique software that offers financial privacy for the users. The privacy feature on the Tornado Cash hides the source and the origin of the funds.
The report indicated that the privacy features in Tornado Cash contributed to the popularity of this platform among criminals. In the report, the lawyers explained that the distinguished features of Tornado Cash, such as hiding the source and destination of the crypto transaction, are completely different from money laundering activities.
Factors Contributing to the Use of Crypto Mixers in Illicit Transfer
According to the Storm’s legal team, money laundering involves the illicit transfer of funds generated from criminal activities such as drug trafficking and terrorist financing, among others. The lawyers described the charges facing Storm as fatally flawed and required to be dismissed.
In the report, the defence team highlighted that the Tornado Cash was not a money transmitter and did not charge the user any transmitting fee. This implies that Tornado Cash did not charge any transaction fees and allowed the user to have complete control of their funds.
In the court report, Tornado Cash is profiled as having several non-custodial smart contracts that allow users to have complete control over their assets.
Compared to the ordinary custodial mixing services, Tornado Cash does not rely on any third party.Based on the features of Tornado Cash, the lawyers argued that the platform was neither a mixer nor a service.
Defence Lawyers Demand for Dismissal of Charges Facing Tornado Cash Developer
Despite supporting the transfer of sizable amounts, the lawyers stated that Tornado Cash does not meet the standards of a financial institution since the users are accountable for their funds.
Additionally, the legal team argued that Storm and his colleagues at the renowned software development company Peppersec did not make any arrangements or agreements with criminals using the Tornado Cash to bypass the Western Sanctions.
Earlier, the US Department of Justice (DOJ) accused Storm of sealing an agreement with the criminals to develop Tornado Cash codes that would be used to hide money laundering activities.
The DOJ claimed that the Tornado Cash developers supported the Lazarus Group to transfer assets worth $1 billion for funding the nuclear programs. The DOJ report resulted in Storm and Semenov being arrested in September of last year.
After their release, the defence team demanded that the DOJ produce substantial evidence to demonstrate the role of Tornado Cash and the developers in money laundering.
In the March 29 motion, the lawyers were against the seizure of Storm crypto holding by the federal agency. They argued that the search warrant issued by the federal agency was inappropriate for the FBI to confiscate the crypto holding owned by Storm.
Also, the lawyers demanded the DOJ share any report from the US regulators and the Dutch government filed against Storm.
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