US Justice Department declines to drop charges against the founder of the Tornado Cash crypto mixer

What’s new? The US Justice Department (DOJ) has denied a motion by Roman Storm, co-founder of the Tornado Cash crypto mixer, to dismiss criminal charges of money laundering. Officials said the defense filings presented disputed talking points that should be considered by the jury. Earlier, Storm’s lawyers challenged the indictment, pointing out that Tornado Cash is not a custodial service and does not fall under the definition of a financial institution, so the defendant could not control the service or block its use by hackers and scammers.

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What else is known? Last August, the DOJ charged Storm and his colleague Roman Semenov with conspiracy to commit money laundering, violating sanctions, and running an unlicensed money transfer business in connection with the launch and operation of Tornado Cash.

According to the authorities, the service was actively used by the Lazarus hacker group from the DPRK, as well as other malicious actors. The amount of laundered funds is estimated at $1 billion.

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Storm was detained and later released on bail, Semenov remains at large. In February this year, Tornado Cash developer Alexey Pertsev, who was detained in the Netherlands, was also accused of laundering $1,2 billion.

Storm’s defense argued that developing code for the project cannot equate to running a money laundering organization. In response, the DOJ said that “the defendant cannot obtain dismissal of the Indictment by simply making factual assertions about his own contested view as to how the Tornado Cash service operated and based on his own self-serving version of his intent or lack thereof when taking certain acts.”

Officials also noted that Tornado Cash included a website, a user interface, a combination of smart contracts, and a network of relayers. Storm and other co-founders retained control of the mixer from at least 2019 through August 2022, when the service was placed on the sanctions list.

Storm will go on trial this September. The maximum penalty for the three charges could be 45 years in prison.

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Earlier, the US Treasury Department called crypto mixers a threat to national security. Also, it accused Samourai Wallet crypto mixer founders Keonne Rodriguez and William Lonergan Hill of conspiring to conduct illegal transactions worth $2 billion, for which they face 25 years in prison each.

In March, a US jury found Bitcoin Fog crypto mixer founder Roman Sterlingov guilty of money laundering, and he faces 50 years in prison.