Co-founder of Tornado Cash is seeking for $1.5 million as his case against the southern district is leaving him with surmounting legal fees to pay. He is now seeking financial support as his legal battle drags on. He is being accused of flouting money laundering laws and violating US sanction laws.
In a X post on July 26, Roman explained the mounting legal costs that incur when one is involved in legal proceedings. He also mentioned that this sounds crazy and that the legal team is ‘working around the clock’
He further added,
“We’ve forgotten what normal sleep feels like. Every hour counts, and so do the costs,”
The crypto community has already donated $3.9 million to fund Storm’s legal fees. The case commenced on July 14, 2024 in New York.
Ramifications of Roman’s Case on Decentralized Technology
Roman’s trial against southern district court is a landmark case as it is likely to shape a precedent for open source code based software and decentralized tech that takes privacy as an important pillar for building innovative tech.
Despite privacy preserving technology, it has received its fair share of negative remarks from industries as it has been used for illicit agents in the broader system. It is linked to the infamous North Korean Lazarus group that has been behind major crypto scams.
The group has used Tornado Cash which led to OFAC setting sanction on the mixer in August 2022. A mixer essentially uses zero knowledge proof to enable private transactions on the blockchain.
Tornado Cash was removed from OFAC’s blacklist in March, after its users successfully challenged the sanctions in a civil action in January.
Roman Storm’s Team Raised Millions In The Past
More than $3.2 million has been raised for Roman Storm’s Legal Defense Fund, which is 65% of his new $5 million goal. Additionally, the Ethereum Foundation successfully reached its $750,000 goal to help with Storm’s legal defense.
More On Roman’s Legal Battle
US prosecutors are contending that Roman Storm conspired to launder money, violated US sanctions, and operated an unlicensed money-transmitting business through his involvement in creating Tornado Cash.
Storm’s legal team, however, is arguing that Tornado Cash was a decentralized and immutable protocol, not a business, and was beyond his control.
They are citing 2019 Financial Crimes Enforcement Network (FinCEN) guidance which stated that developers of anonymizing software did not need to register as money transmitters.
Additionally, they are asserting that the First Amendment protects the right to write and publish code as free speech in the US.
Earlier this month, Roman demanded a mistrial to Manhattan federal judge Katherine Polk Failla after being hit by a witness testimony given by Hanfeng Lin. This angle in the case brought another argument that Tornado Cash was used by a malicious scammer in a pig butchering scam where Lin was at the receiving end,
Impact on Co-Founders of Tornado Cash
Roman Storm, alongside Alexey Pertsev and Roman Semenov, co-founded Tornado Cash in 2019. Their inspiration stemmed from a conversation with Ethereum co-creator Vitalik Buterin earlier that year, who encouraged the exploration of crypto privacy tools.
Alexey Pertsev was found guilty of money laundering in the Netherlands in May 2024 and is currently appealing the verdict. He has been released from Dutch custody, but under strict conditions, including electronic monitoring. Roman Semenov remains at large and is currently on the US Federal Bureau of Investigation’s wanted list.