DOJ opposes motion to dismiss money laundering charges against Tornado Cash co-founder

Author: Amaka Nwaokocha, CoinTelegraph; Compiler: Wuzhu, Golden Finance

The U.S. Department of Justice (DOJ) opposed a motion to dismiss conspiracy and money laundering charges against Tornado Cash co-founder Roman Storm, arguing that the application presented disputed facts for the jury to consider that were inappropriate for an early motion.

In the DOJ's response, prosecutors analyzed why the Tornado Cash co-founder should be held accountable for the crimes he is accused of. The DOJ disputed the defense's description of Tornado Cash, noting that it was launched in 2019 as a cryptocurrency mixer. The service includes a website, a user interface, a set of smart contracts, and a network of "relays."

The U.S. Department of Justice charged Roman Storm and fellow developer Roman Semenov with conspiracy to launder money, operate an unlicensed money transmitter, and violate sanctions by creating Tornado Cash, a cryptocurrency mixing service. U.S. authorities allege that entities such as North Korea's Lazarus Group used Tornado Cash to launder money.

Court documents filed in the U.S. District Court for the Southern District of New York. Source: Court Audience

In September 2023, Storm pleaded not guilty to all charges and was released on $2 million bail shortly after his arrest. He was primarily restricted from traveling outside of New York, New Jersey, Washington, and parts of California.

However, in late March, Storm 's lawyers sought to dismiss the indictment, saying authorities lacked grounds to charge him. Semenov clarified that he contributed to the code design but was not responsible for its use.

His legal team's motion to dismiss emphasized that Tornado Cash does not operate as a custodial mixing service and does not meet the criteria of a "financial institution." They claimed that Storm had no control over the service and could not prevent entities such as the Lazarus Group from using it.

In the filing, the prosecutors' team, led by Damian Williams, argued that Storm was responsible for operating a cryptocurrency mixer and accused him of developing systems that helped anonymous criminals. They criticized Tornado Cash’s co-founders for not making enough changes to exclude sanctioned addresses.

The move comes as the U.S. government continues to crack down on cryptocurrency mixing services.

On April 24, co-founders of cryptocurrency mixing company Samourai Wallet, Samourai Wallet CEO Keonne Rodriguez, and CTO William Hill were arrested and charged with conspiracy to launder money, which carries a maximum sentence of 20 years in prison, and conspiracy to operate an unlicensed money transmission business, which carries a maximum sentence of five years in prison.

In response to the recent arrest of the Samourai Wallet founder,CryptoQuant CEO Ki Young Ju said that cryptocurrency mixing services are not inherently criminal.