Tornado Cash dev Roman Storm faces retrial

Less than a week after the US Treasury Department acknowledged crypto mixers can serve “legitimate financial privacy purposes,” federal prosecutors have decided they will take another shot at securing a lengthy prison sentence for Roman Storm, the co-founder of Tornado Cash.

Those prosecutors called privacy a “cover story” and a “distraction” during their closing argument in Storm’s first criminal trial last July.

“The real money wasn’t in so-called ‘privacy’ for normal people,” prosecutor Benjamin Gianforti said. “It was in hiding dirty money for criminals.”

But it didn’t quite convince the jurors, who were split on the two most severe charges: conspiracy to launder money and conspiracy to evade sanctions, each of which comes with a maximum prison sentence of 20 years.

Jurors did convict on the third, lesser charge of operating an unlicensed money-transmitting business, which comes with a max sentence of five years.

Storm decried prosecutors’ decision on X on Monday night. He said he was being pursued “for writing open-source code. For a protocol I don’t control. For transactions I never touched.”

“A jury already couldn’t agree this was criminal,” he continued. “But the SDNY prosecutors want to keep trying with the hope of getting a different answer.”

In a two-page letter to Judge Katherine Polk Failla, prosecutors said they were ready to begin a retrial “this spring,” but were told the defence wouldn’t be ready before September.

Prosecutors requested that the new trial begin on October 5 or 12, “to avoid the emergence of further scheduling conflicts and any additional delays.” They expect it to last three weeks.

But the feds’ request doesn’t necessarily mean there will be a second trial.

After the first one ended, Storm asked Failla to toss all three charges. Prosecutors’ evidence did not prove he had acted with criminal intent and that the case should never have been tried in New York, he argued.

Storm has a hearing on that motion scheduled for April 9. And a recent decision from Failla suggests she’s sympathetic to some of the arguments he and his supporters have made in his defence.

This month, Failla dismissed a class-action lawsuit targeting the creators of Uniswap, the world’s largest decentralised exchange.

That lawsuit was filed by traders who lost money on “scam tokens” they found on Uniswap.

Here’s the judge’s take, summed up in a single sentence: “Plaintiffs cannot hold defendants liable for the misconduct of the unidentified third-party issuers.”

And that sounds a lot like the argument one of Storm’s attorneys, David Patton, made during the first trial’s closing arguments.

Tornado Cash makes it difficult, if not impossible, to trace crypto transactions on Ethereum and several other blockchains.

“Did that make it very useful to criminals? Of course it did,” Patton said. But that was true of many other everyday items.

“Probably the most obvious example is something you check in at the courthouse every day: your phone.”

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Aleks Gilbert is DL News’ New York-based DeFi correspondent. You can reach him at aleks@dlnews.com.