DOJ Opposes Tornado Cash Developer’s Motion To Dismiss, Says Defendant Exercising Misdirection

The U.S. Department of Justice (DOJ) is pushing back against a Tornado Cash founder’s efforts to have his charges dismissed.

Tornado Cash is an Ethereum (ETH)-based coin mixing system that helps users conceal their digital assets.

The US sanctioned the controversial project 2022 for national security purposes. One of its founders, Roman Storm, was arrested last year and slapped with charges related to allegedly laundering $1 billion in criminal proceeds, including hundreds of millions of dollars for the Lazarus Group, the sanctioned North Korean cybercriminal outfit.

Earlier this month, Storm’s lawyers pushed to have the case against him dropped, arguing that the developer simply created decentralized software solutions to “provide financial privacy to legitimate cryptocurrency users,” which they said was technically not a crime.

In a new filing, the DOJ argues that Storm’s motions “are an exercise in misdirection” and should be dismissed entirely.

“The indictment alleges, and the government expects to prove at trial, that the Tornado Cash service was ‘a seamless and fully integrated service that executed anonymous transactions’ for its customers. Its features included a website and a user interface (the ‘UI’), certain smart contracts that held commingled customer deposits (the ‘Tornado Cash pools’), multiple other smart contracts that were key components of the service, and a relayer network that processed withdrawals in exchange for fees. (Id.).

The defendant’s motion to dismiss argues that these factual allegations are wrong, and that ‘Tornado Cash’ refers only to the Tornado Cash pools and nothing else.”

Earlier this month, the Blockchain Association, a prominent crypto advocacy group, filed an amicus brief in support of Storm. The lobbying group claimed the government’s prosecution had a “critical flaw.”

“The indictment’s portrayal of the government’s money-transmitter charges lacks substance, primarily because the indictment fails to allege facts demonstrating the defendants’ or Tornado Cash’s control over the funds at issue.”

The DOJ also charged Tornado Cash co-founder Roman Semenov, though he remains at large.

Additionally, one of the project’s developers, Alexey Pertsev, was arrested in the Netherlands on money laundering charges in 2022.

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