Roman Storm, co-founder of the crypto mixer Tornado Cash, has requested a review of the denied motion to dismiss the case following a decision by the appellate court.
In November, the U.S. Fifth Circuit Court of Appeals ruled that the OFAC exceeded its authority when imposing sanctions against the mixing service in 2022.
Storm’s lawyers argue that the decision “clearly indicates that all three counts of the indictment are fatally and legally flawed.”
The ruling “most evidently” impacts claims regarding violations of the “International Emergency Economic Powers Act,” the attorneys noted.
The court concluded that smart contracts “are not the property” of any foreign national or organization. This means they “cannot be blocked” under regulatory requirements. They can be used by anyone, including North Korean hackers, while the creators are unable to “reset, alter, disable, or control the contracts,” the lawyers emphasized.
Regarding the charges of operating an unlicensed money transmission business and money laundering, they also referred to the appellate decision. It determined that Tornado Cash is not a business, legal entity, or financial institution, and the protocol became “immutable” in May 2020 — four months before the alleged conspiracy. For these reasons, the claims should be dismissed, the lawyers believe.
In August 2023, the U.S. Department of Justice charged Storm and another co-founder of the crypto mixer, Roman Semenov. The former was arrested, while the latter remained free but was sanctioned.
In May 2024, a Dutch court found Tornado Cash developer Alexey Pertsev guilty of laundering $1.2 billion and sentenced him to 64 months in prison.
Since then, he has been preparing to file an appeal. In July, the court denied him bail, and in November extended his pre-trial detention.