In an unexpected twist, attorneys representing Tornado Cash developer Roman Storm have urged a federal court to reconsider dismissing the case against him, alleging that prosecutors concealed critical exculpatory evidence. The evidence, pivotal in the case’s trajectory, pertains to communications with the Financial Crimes Enforcement Network (FinCEN) from 2023, which purportedly clarify that non-custodial crypto mixers such as Tornado Cash do not meet the criteria for a “money transmitting business.”
Legal Tussle Over FinCEN Evidence
On May 16, Storm’s legal team filed a motion addressed to Judge Katherine Polk Failla, arguing that the withheld FinCEN documents could decisively impact the legal standing of their client. These documents, they claim, assert that crypto mixers fall outside the regulatory boundaries traditionally applied to financial transmitters—a fact prosecutors allegedly knew since 2023 yet proceeded with the case regardless.
In response, federal prosecutors have refuted the claim of evidence suppression, maintaining that all pertinent FinCEN communications were timely shared with the defense as part of the discovery process. However, Storm’s attorneys are drawing parallels with a similar legal confrontation involving the developers of Samourai Wallet, where the government’s handling of FinCEN guidance was also called into question. This legal battle echoes broader concerns about privacy and data protection, as seen in Coinbase’s defense of user data against IRS demands.
“The disclosures in the Samourai case reveal that the government, at the very least, played fast and loose and, at worst, affirmatively misled this Court,” Storm’s attorneys asserted in their filing, challenging the government’s narrative and emphasizing the legal significance of the FinCEN paperwork in both cases.
Broader Implications for Crypto Mixers
These legal maneuvers unfold against a backdrop of mounting scrutiny on cryptocurrency mixers, which have long been under the regulatory microscope. In a landmark decision on April 28, Judge Robert Pitman ruled that the Office of Foreign Assets Control (OFAC) could not reinstate sanctions against Tornado Cash, setting a crucial precedent for non-custodial mixing services. This ruling, however, hasn’t deterred federal prosecutors from pressing forward with their case against Storm, albeit with adjusted charges.
For those unacquainted, crypto mixers are tools that enhance privacy by obfuscating transaction trails. While they have legitimate uses, they also attract attention for their potential to facilitate illicit activities. The outcome of Storm’s case could ripple across the industry, influencing how regulatory bodies and developers navigate the murky waters of privacy and compliance. This is particularly relevant as U.S. Congress prepares for a heated debate over crypto legislation this summer, which could further shape the future of crypto regulation.
The Road Ahead
As Roman Storm’s trial draws nearer, the crypto community watches with bated breath. The legal arguments poised to unfold will likely resonate far beyond this individual case, potentially reshaping the regulatory landscape for crypto mixers and privacy-focused projects.
Yet, uncertainty looms. The question remains whether the FinCEN documents will indeed tip the scales in Storm’s favor, or if the court will side with the prosecution’s stance. As the legal proceedings continue, the case underscores the ongoing tension between innovation in the crypto space and the frameworks designed to regulate it.
Whereas the FinCEN guidance offers a semblance of clarity, its interpretation and application in court remain contentious. Looking ahead, the crypto world is keenly aware that the resolution of this case might set a precedent that could either bolster or stifle privacy-centric innovations—a development that could reverberate through the corridors of blockchain innovation.
Source
This article is based on: Tornado Cash dev's attorneys say prosecutors hid exculpatory evidence
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
