tl;dr
The Ethereum Foundation will match up to $500,000 in donations to support Roman Storm's legal defense after his conviction for operating an unlicensed money transmitter related to Tornado Cash, a cryptocurrency mixer sanctioned for laundering $7 billion. Storm faces up to five years in prison if his...
The Ethereum Foundation announced on Thursday that it will match up to an additional $500,000 in donations to support Roman Storm's legal defense. This pledge follows the recent conviction of the Tornado Cash co-founder on one of three federal charges, raising concerns among experts about the criminalization of code development. Wei Wang, co-executive director of the Ethereum Foundation, emphasized the importance of privacy and the legitimacy of coding by stating, "Privacy is normal, and writing code is not a crime."
Storm was found guilty by a Manhattan jury of conspiring to operate an unlicensed money transmitter, while the jury remained deadlocked on other charges related to money laundering and sanctions evasion after four days of deliberation. The Free Pertsev & Storm legal aid group highlighted the critical need for ongoing funding, warning that Storm faces up to five years in prison if his appeal fails, and potentially decades if the government attempts to retry the unresolved counts. The group's statement underscored that the case's outcome could set a significant precedent for developers worldwide.
Storm’s legal challenges arise from his involvement in developing Tornado Cash, a coin mixer designed to obscure cryptocurrency transactions by pooling user funds. The protocol was sanctioned by the U.S. Treasury Department in August 2022, citing $7 billion laundered through it since 2019, including use by North Korean hackers. Prosecutors accused Storm of profiting from facilitating criminal money laundering, whereas his defense argued that Tornado Cash served as a privacy tool for ordinary users, not as an instrument for illicit purposes.
Industry experts expressed concern over the implications of the verdict. HashKey Group’s Chief Analyst Jeffrey Ding described it as a troubling precedent that navigates uncharted legal territory for open-source privacy software. Crypto lawyer Jake Chervinsky called it "a sad day for DeFi," highlighting that legal statutes should not apply to developers of non-custodial protocols who have no control over user funds. Chervinsky hopes the appellate court will correct the decision, emphasizing the need to protect innovation in decentralized finance.
Storm previously requested an additional $1.5 million to cover mounting legal expenses during his intense three-week trial. Moreover, this case resembles other recent legal actions against crypto privacy projects, such as when Samourai Wallet founders pleaded guilty to similar charges involving the laundering of over $100 million. Their sentencing is scheduled for early November, reflecting a broader crackdown on cryptocurrency mixers accused of facilitating large-scale money laundering and sanctions evasion.
This legal battle shines a spotlight on the tension between privacy technology and regulatory enforcement, posing critical questions about the future of decentralized finance, code development rights, and the boundaries authorities set on software tools that emphasize user anonymity.