Ethereum Foundation Commits to Doubling $500K Funds for Roman Storm's Legal Battle
In a landmark case, Roman Storm, a developer known for his work on Tornado Cash, a popular cryptocurrency mixing service, has been found guilty by a Manhattan jury of conspiring to operate an unlicensed money transmitter. The verdict, handed down earlier this month, has sent shockwaves through the crypto community, with experts warning that it could set a dangerous precedent for open-source privacy software.
The Tornado Cash protocol has been under scrutiny for its alleged links to illegal activities. According to the U.S. Treasury Department, it has been frequently used by North Korea's Lazarus Group hackers, with over $7 billion laundered through it since 2019. The U.S. Treasury Department sanctioned the Tornado Cash protocol in August 2022.
Roman Storm's defense argued that Tornado Cash was designed as a privacy tool for ordinary users, not specifically for illicit activities. However, prosecutors portrayed Storm as someone who profited from hiding dirty money for criminals.
The outcome of Storm's case will set a major precedent for developers worldwide. If prosecutors retry Storm on the money laundering and sanctions charges, he faces potential sentences of up to 20 years in prison for each of those charges. Previously, the jury convicted him only on the lesser charge of conspiracy to operate an unlicensed money transmitting business, which carries a maximum sentence of five years in prison. The jury was deadlocked on the more serious charges of conspiracy to commit money laundering and conspiracy to violate U.S. sanctions.
Jeffrey Ding, HashKey Group Chief Analyst, stated that the verdict underscores unprecedented legal territory for open-source privacy software. Ding considers the verdict a troubling precedent, where authorities are willing to test the limits of applying financial crime statutes to code developers.
The Ethereum Foundation, in response to Storm's conviction on one of three federal charges that experts say could criminalize code development, announced a matching donation of up to $500,000 for Storm's legal defense. Wei Wang, co-executive director of the Ethereum Foundation, tweeted that "Privacy is normal, and writing code is not a crime." Crypto lawyer Jake Chervinsky echoed this sentiment, calling the verdict a sad day for DeFi and urging the case to proceed on appeal.
Meanwhile, the founders of another crypto mixing service, Samourai Wallet, have also faced legal troubles. This week, William Lonergan Hill and Keonne Rodriguez pleaded guilty to conspiracy to operate an unlicensed money transmitter. Prosecutors allege the Samourai Wallet laundered over $100 million, calling it a haven for large-scale money laundering and sanctions evasion.
The Free Pertsev & Storm legal aid organization emphasized the urgency of continued funding, stating that Storm "risks up to 5 years of jail time if he doesn't win the appeal, and potentially decades if the government decides to retry Counts 1 & 3." The sentencing for Roman Storm is scheduled for November 6.
In a related development, the Ethereum Foundation's matching pledge comes in response to Roman Storm's conviction on one of three federal charges that experts say could criminalize code development. The organization's support is a clear indication of the wider crypto community's concern over the implications of this case for the future of privacy-focused crypto development.
| Charge | Potential Maximum Sentence | |---------------------------------|------------------------------------| | Conspiracy to operate unlicensed money transmitting business | Up to 5 years | | Conspiracy to commit money laundering | Up to 20 years | | Conspiracy to violate U.S. sanctions | Up to 20 years |
If prosecutors retry Roman Storm on the money laundering and sanctions charges, he faces potential sentences of up to 40 additional years if convicted on both counts.
- The conviction of Roman Storm, a developer known for his work on Tornado Cash, has sparked concerns within the crypto community about the future of open-source privacy software.
- Jeffrey Ding, HashKey Group Chief Analyst, views the verdict as a troubling precedent, where authorities may attempt to test the limits of applying financial crime statutes to code developers.
- The Ethereum Foundation announced a matching donation of up to $500,000 for Roman Storm's legal defense, highlighting the wider crypto community's concern over the implications of this case for the future of privacy-focused crypto development.
- Crypto lawyer Jake Chervinsky calls the verdict a sad day for DeFi and urges the case to proceed on appeal, echoing Wei Wang, co-executive director of the Ethereum Foundation, who tweeted that "Privacy is normal, and writing code is not a crime."
