Roman Storm attempts to have charges dismissed when a judge decides Tornado Cash smart contract U.S. sanctions were illegal.
Following a significant victory in court, Roman Storm, the co-founder of Tornado Cash, is advocating for the dismissal of criminal proceedings against him. The Fifth Circuit Appeals Court has just determined that the penalties imposed by the U.S. Treasury on Tornado Cash’s smart contracts were invalid. This decision has the potential to make a significant impact on Storm’s case, which entails severe allegations, such as money laundering. Furthermore, Tornado Cash prevailed in the case, as the sanctions facilitated a 700% increase in the native token Torn last month.
The appeals court issued a bold declaration in its ruling, asserting that the sanctions imposed by the Treasury on Tornado Cash’s smart contracts were unlawful. Tornado Cash’s smart contracts are immutable, as per the ruling. This means that they cannot be altered or terminated by anyone, including the creators.
The court also clarified that these contracts are not considered “property” under U.S. law, and as a result, they cannot be prohibited or sanctioned by the government. Storm also requested that the court dismiss the grievous charges of money laundering, particularly the charge that he conspired to violate the International Emergency Economic Powers Act (IEEPA), which compelled the imposition of U.S. sanctions, in light of this critical factor.
Storm is employing this ruling to contend that the accusations against him are faulty in an effort to retaliate. He maintains that Tornado Cash is not a financial institution and that it became immutable in May 2020, prior to the alleged money-laundering allegations. It is intriguing that he asserts that it was impossible for him to conspire to launder money using a protocol that was beyond the control of anyone, including himself. In other words, there is no tangible evidence to support the claim that he utilized the platform to launder money.
The Tornado Cash users, with the support of Coinbase, initially filed a lawsuit against the U.S. Treasury and its Office of Foreign Assets Control (OFAC) in response to the case, which has elicited significant indignation. Despite the fact that the users initially lost the court case, the ruling was ultimately overturned in November 2023, providing Tornado Cash supporters with a significant victory.
The case is also indicative of the manner in which US law enforcement agencies approach decentralized platforms. The developer’s endeavor to challenge the agencies will undoubtedly result in a permanent change for future cases.
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