Tornado Cash mixer co-creator Roman Storm could face a 45-year sentence on charges of conspiracy to commit money laundering.
Storm’s defense team brought up the possibility of a mistrial to Manhattan federal judge Katherine Polk Failla on Monday. This move came as they challenged the testimony given by government witness Hanfeng Lin on Tuesday, according to Inner City Press. If proven and agreed upon, this could truly change his case. This could also result in proving his trial to be invalid as a result of judicial error. If not dismissed his case could be handed over to a different judge.
Accused of multiple offenses related to Tornado Cash, the crypto mixing service he co-founded, Storm is facing significant legal consequences.
While he is the one facing the music, the other co-founder of Tornado Cash, Roman Semenov is believed to be hiding in native Russia.
The charges, filed in 2023, include money laundering conspiracy, conspiracy to violate US sanctions, and conspiring to run an unlicensed money transmitting business, carrying a maximum potential sentence of 45 years.
Government Witness Testimony Allegedly Falsifies Storm’s Involvement
Hanfeng Lin, a victim of pig butchering, took the stand and gave testimony on how she was scammed of $190,000.
She was lured by the scammer to transfer money to a crypto exchange. After she transferred the money, a false website was shared with her on which the site demonstrated that she is making profits with her investment. Since it looked so real, she transferred more money. When she was unable to withdraw money, she went ahead and tried contacting the customer service. After connecting with the support, she realised that she is perhaps scammed. According to her testimony, all of her money was invested in Bitcoin.
“My Bitcoin was stolen,” she reported, “and Payback, a crypto recovery service, informed me that some of it passed through Tornado Cash.”
“Based on our research over the weekend, we can’t find that any of Ms. Lin’s funds went to Tornado Cash,” Roman Storm’s lawyer, David Patton said, according to Inner City Press. “We need to confer with Mr. Storm about moving for a mistrial.”
FBI Special Agent Said He Didn’t Look At Lin’s Case
The Rage, a publication noted that the special FBI tracing expert, Joseph DeCapua, said he wasn’t told to analyze any of Lin’s transactions. DeCapua had previously testified, detailing the alleged movement of cryptocurrency from hacks into Tornado Cash. Storm’s lawyer, Patton, stated the defense anticipated DeCapua would link Lin’s crypto flows to the protocol, but “apparently he hasn’t.”
Prosecutors shared that they will call the IRS analyst Stephan George, another assets tracing expert to look into Lin’s transactions and link them to Tornado Cash.
Skeptics Doubt Lin’s Testimony
While the extent of the Storm defense team’s own research remains undisclosed, blockchain researchers have recently asserted on social media that on-chain transactions linked to Lin’s scammers demonstrate the funds never interacted with Tornado Cash.
On Friday, MetaMask security researcher Taylor Monahan asserted on X that Lin’s scammers did not use Tornado Cash, providing a detailed account of how she traced Lin’s funds.
Monahan explained that the scammers swapped Lin’s Bitcoin for Ether, and this transaction was bundled on-chain with others. Payback, the crypto tracing firm hired by Lin, mistakenly attributed these bundled transactions as originating from the scammer.
Blockchain analyst ZachXBT corroborated Monahan’s findings and openly criticized Payback’s analysis.
He took to X to share his thoughts on the case,
He also expressed bewilderment at the firm’s alleged misstep, writing,
“I don’t know how you mess up the tracing that bad as a firm to where you couldn’t properly follow instant exchange deposits 1 hop from a theft address and then follow subsequent transactions down the wrong path to Tornado Cash.”
ZachXBT
So Where Does Storm Stand?
Judge Failla stated she is examining the judicial handling of recent crypto cases, citing those of FTX’s Sam Bankman-Fried and OneCoin’s Karl Greenwood as examples.
Jury selection for Storm’s trial commenced on July 14, and the proceedings are anticipated to last for another two to three weeks.
Tornado Cash was designed to offer privacy-protected transactions on the blockchain. However, much like Ross Ulbricht, the founder of Silk Road, was sentenced to a double life sentence, the punishment for building groundbreaking platforms can be hefty, as seen in Storm’s case.