Roman Storm, co-founder of the cryptocurrency mixing platform Tornado Cash, has requested the dismissal of his criminal charges, citing a recent decision from the Fifth Circuit Appeals Court. In a motion submitted on December 18 to a Manhattan district court, Storm argued that an earlier ruling determined the sanctions imposed on Tornado Cash’s smart contracts were unlawful, deeming all charges against him as fundamentally flawed.
The Fifth Circuit’s opinion stated that the Treasury’s Office of Foreign Assets Control (OFAC) had overstepped its authority by sanctioning Tornado Cash. Storm highlighted that the court concluded smart contracts do not qualify as the property of any foreign national or entity, rendering them immune from being blocked under U.S. law. This finding directly challenges the charge against Storm related to violating the International Emergency Economic Powers Act (IEEPA).
In its ruling, the Fifth Circuit noted the immutable nature of Tornado Cash’s smart contracts, which cannot be changed or removed. This means that while these contracts can be used by anyone, including individuals affiliated with sanctioned groups, the creators cannot intervene to prevent such usage. Storm emphasized that the district court had previously stated it could not determine whether Tornado Cash was immutable at the time it denied his motion to dismiss in September. However, the appeals court’s recent ruling has established this point as a matter of law, suggesting that there is no further issue for a jury to decide.
Beyond the IEEPA charge, Storm faces additional accusations related to operating an unlicensed money-transmitting business and conspiracy to commit money laundering. He contended that Tornado Cash does not function as a financial institution and argued that the protocol became immutable in May 2020, which predates the alleged conspiracy’s commencement.
The ruling stems from a lawsuit filed by several Tornado Cash users, supported by a cryptocurrency exchange, against the Treasury and OFAC. Storm and co-founder Roman Semenov were charged in August 2023 with laundering more than $1 billion in cryptocurrency through Tornado Cash, including transactions linked to North Korean hackers. Semenov is currently at large, while another co-founder, Alexey Pertsev, was arrested on related charges in the Netherlands and is in pre-trial detention.
