Prosecutors hid key evidence, day Tornado Cash devs

Roman Storm’s defense attorneys allege that federal prosecutors have misrepresented the legal status of noncustodial crypto mixers under U.S. law in their arguments to the court.

Citing emerging evidence from the prosecution of Samourai Wallet developers, Storm’s lawyers bolstered their claims.

According to a motion Storm’s defense filed on May 16, they argue that prosecutors withheld key communications with the Financial Crimes Enforcement Network (FinCEN), potentially discrediting the claim that Tornado Cash operated unlawfully as a money transmitter.

The filing states that a call took place in August 2023 between prosecutors from the Southern District of New York and high-ranking FinCEN officials, which recently came to light through the Samourai Wallet case.

Since Samourai Wallet did not hold custody of customer funds, FinCEN suggested during the call that it likely wasn’t a money services business—a label that brings extensive regulatory oversight.

Tornado Cash, like Samourai Wallet, operates as a noncustodial crypto mixing protocol.

Defense attorneys maintain that constant user control over their own assets plays a pivotal role in evaluating the legal status of these services as money transmitters.

The legal team argued that state prosecutors knowingly ignored FinCEN’s guidance on crypto mixers when they filed cases against both Samourai Wallet and Tornado Cash.

Prosecutors claim they submitted the FinCEN communications on time and deny any wrongdoing in sharing evidence during discovery.

Storm’s defense invoked the legal documentation and arguments that Samourai Wallet’s counsel used in a May 5 letter to the court.

Storm’s attorneys wrote:

“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 with its arguments about FinCEN guidance when responding to the motions to dismiss and to compel discovery.”

The correspondence stated that while the government insists the cases bear only “superficial” resemblance, both cases share the core legal attributes of crypto mixers, which makes the FinCEN evidence crucial for dismissing Storm’s case.

In a ruling on April 28, Federal Judge Robert Pitman denied the Office of Foreign Assets Control’s (OFAC) request to reimpose sanctions on Tornado Cash after it had been removed from Treasury’s blacklist earlier in March, thereby establishing a legal standard for how courts treat non-custodial mixers.

Despite amending the charges, federal prosecutors in the U.S. chose to continue advancing the case against Storm.