Crypto Mixer Co-Founder on Trial as Trump Embraces Digital Assets | Company Business News-OxBig News Network

While President Donald Trump’s administration has dropped or rolled-back several high-profile actions against the US digital asset industry, the ongoing case involving crypto mixer Tornado Cash is a significant exception.

Roman Storm, co-founder of a software platform that facilitates anonymous crypto transactions, is facing a trial on charges that he helped launder more than $1 billion, with opening arguments scheduled to start Tuesday in New York. That sum includes hundreds of millions allegedly stolen by the Lazarus Group, which the US says is a cybercrime organization that works for the North Korean government.

Storm, 36, has denied wrongdoing. He faces as much as 45 years in prison if convicted of the three conspiracy counts against him.

Tornado Cash is known in the industry as a privacy mixer because it jumbles crypto from different sources before sending them to the ultimate receiver and making the chain of transactions harder to trace. 

The service has allegedly been used in several high-profile crypto heists including in 2022 the $600 million exploit affecting then-popular blockchain game, Axie Infinity.

Regulators around the world have to sought to crack down on crypto mixers, and despite the current US administration’s pro-crypto posture, the Justice Department has continued to pursue cases similar to Storm’s. 

Prosecutors in New York are pressing ahead with charges against two founders of the Samourai Wallet crypto-mixing service accused of helping launder $100 million for darkweb marketplaces. In June, the department charged four North Koreans who were accused of posing as remote tech workers to steal more than $900,000 in virtual currencies that were allegedly laundered through Tornado Cash.

Despite Trump’s pro-crypto stance, his administration “is not monolithic,” said Renato Mariotti, a former federal prosecutor.

“It’s certainly possible to be pro-crypto and nonetheless to believe that if someone is conspiring to engage in criminal activity that they should be held responsible,” said Mariotti, who is now a partner at Paul Hastings. “At the end of the day, that distinguishes Tornado Cash from a variety of other players in the space who are acting legally.” 

Storm has received widespread support from the industry, and groups including the DeFi Education Fund, the Blockchain Association, the Electronic Frontier Foundation and prominent crypto venture capital firm Paradigm Operations have filed briefs in the case in support of Storm. Coinbase Global Inc. helped fund a related lawsuit linked to sanctions against Tornado Cash.

Storm last week called on the crypto community and privacy advocates to donate to his legal fund, saying he’s facing a “critical shortfall” as the trial is expected to take longer than expected and needs to raise $500,000 in the next few days and $1.5 million within a couple of weeks.

Paradigm — which donated $1.25 million to Storm’s defense — said that subjecting a software developer to criminal liability for the actions of their users “would be as absurd as prosecuting a television manufacturer for state secrets being divulged on-air, leather craftsmen for wallets holding stolen cash or Apple for conspiracies formed through iPhone conversations.” 

Storm, a native of Kazakhstan who obtained political asylum in the US after fleeing persecution in Russia for opposing its invasion of Georgia, says he simply built privacy tools for legitimate crypto holders and had no control over Tornado Cash’s customers. He argues the prosecution is an “unprecedented attempt to criminalize the development of software.”

Storm and fellow Tornado Cash co-founder Roman Semenov were charged by the US in 2023 for conspiring to launder money and violating US sanctions. Semenov, a Russian national, isn’t in custody and hasn’t responded to the US charges.

Another co-founder, Alexey Pertsev, was charged by Dutch authorities in 2022, convicted in May 2024, and sentenced to more than five years in prison. 

The trio launched Tornado Cash in August 2019, advertising the service as a cryptocurrency “mixer” that allows users to send Ethereum anonymously using “groundbreaking, non-custodial technology based on strong cryptography!” 

But in April 2022, after the Treasury Department said it tied the Lazarus Group to the Axie Infinity game hack, blockchain data showed that some of the stolen funds had been moved to Tornado Cash. Four months later, the US sanctioned Tornado Cash, barring American companies and individuals from doing business with it. 

In September 2022, six individuals, including two Coinbase Global employees, sued the Treasury Department over the sanctions, alleging that the department overstepped its authority to block financial transactions benefiting foreign terrorists. The suit, which was partially organized and funded by Coinbase, alleged that the department ensnared law-abiding Americans conducting legitimate digital commerce.

In November, a federal appeals court ruled that the Treasury Department overstepped its authority by sanctioning Tornado Cash, siding with the Coinbase-backed suit, and the department subsequently removed the sanctions in March. US District Judge Katherine Polk Failla barred the government from mentioning the sanctions or the Coinbase-backed suit during trial, saying that such testimony was likely to confuse the jury. 

The case is US v. Storm, 23-cr-00430, US District Court, Southern District of New York .

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