The DOJ said Roman Storm did more than write code in response to the defense’s motion to dismiss.

Government prosecutors have filed a new 111-page motion to dismiss conspiracy and money laundering charges against Tornado Cash co-founder Roman Storm.

Storm, who was indicted along with co-founder Roman Semenov, faces up to 20 years in prison on charges of conspiracy to launder money and conspiracy to violate the International Economic Emergency Powers Act. . , is charged with conspiracy to operate an unlicensed money transfer business and could face up to five years in prison.

Cryptocurrency investors and industry groups have come together to come to Storm’s aid, raising money for his legal defense and lawsuit. friend Government prosecutors, led by Damian Williams, U.S. Attorney for the Southern District of New York, said in a brief supporting the dismissal of Storm’s charges that characterizing Storm’s crimes as simply writing code obscures his role in promoting and maintaining Tornado Cache. said. That’s when he learned that it was being used to launder illegal proceeds from the hack.

Tornado was a “commercial enterprise”

“The indictment clearly alleges that Tornado Cash Service was a commercial enterprise conducted for profit or finance (original text) profits, and Defendants themselves benefited from its operations by controlling, along with others, key components of the integrated Tornado Cash service,” the motion states.

For example, while it is true that the smart contracts powering Tornado were directly accessible, the indictment states that most users used the default interface and that 98% of users used an optional network of relays set up and operated by relayers. I admit it. Tornado’s co-founders have manually whitelisted it until March 2022. While Storm’s motion challenges the characterization of Tornado as a money transfer business, prosecutors argue that “…the Tornado Cash service gave rise to all of these actions. The Tornado Cash service in the general sense does not permit customer deposits or withdrawals in this manner.” “We were transferring funds while executing the .”

Other steps Semenov and Storm have taken to keep Tornado running include paying to host the site, paying gas for blockchain transactions, “opting out” of implementing appropriate anti-money laundering programs, and creating new solutions to maintain the relay network and maintain service. This involved developing features. Anonymous. The government alleges that these actions were part of the accused conspiracy because they took these actions after learning that Tornado had been used to launder the proceeds of several large-scale hacks.

One way the government shows that Storm was aware of his legally risky behavior is a claim Storm himself has acknowledged. “On April 14, 2022, the day the indictment alleges the conspiracy to violate IEEPA began, the defendants sent the following link to other Tornado Cash founders: A news article that the FBI attributed the Ronin hack to the Lazarus Group In the message sent with full knowledge that the Tornado Cash service was laundering proceeds from the Ronin hack, the defendant wrote:

Tornado Cash developers implemented UI changes to filter out OFAC-approved wallets, but the indictment alleges that this was not enough to prevent Lazarus’ illegal activities. The immutable smart contracts that make up Tornado.

“Despite knowing that their UI changes were ineffective, they made public statements implying they were complying with the law,” the indictment reads. “Then, despite obtaining confirmation that the UI changes were not effective, Defendants and the Tornado Cash founders took no further action to prevent the Lazarus Group from continuing to use the Tornado Cash Service to launder funds and evade sanctions. They proceeded. “I knew what was going on.”

Don’t just write code

Cryptocurrency advocacy groups are aiming to frame the case as a threat to the freedom to code online, but government prosecutors say “the government has not charged the defendants with writing code or a threat to the freedom to code.” It was revealed. maintains the website,” prosecutors argue in the filing, which “…does not raise the question of what happens to a defendant whose sole act is to write code for a smart contract deployed on Ethereum.” “Blockchain.”

But “the success of the Tornado Cash service in laundering vast amounts of criminal proceeds demonstrates the need for restrictions,” government prosecutors argue. In fact, the indictment provides one picture of this success in the form of $2.7 million in Tornado revenue that Storm says it transferred to an as-yet-unidentified cold wallet. Storm also claims to have accessed Binance using a VPN and accounts under false identities to cash out other Tornado Cash proceeds.

Prosecutors wrote that determining Storm’s actions were lawful simply because they involved writing computer code would “…undermine not only criminal law enforcement, but all regulatory efforts to address conduct that occurs using computers or on the Internet.”

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