Roman Storm warned that the US DOJ could prosecute DeFi developers

Roman Storm, founder of the Tornado Cash privacy protocol, raised concerns within the open-source software community about the risk of retroactive prosecution by the US Department of Justice (DOJ) for developing decentralized finance (DeFi) platforms.

Addressing DeFi developers, Storm asked, “How can you be certain that the DOJ will not charge you as a money service business for building a non-custodial protocol?” 

With the growing uncertainties in the ecosystem, the founder warned that the DOJ could possibly create a case against them. This was after he argued that any decentralized, non-custodial service might have been established as a custodial service under regulatory scrutiny.

Notably, Storm pointed out that this situation is similar to what he encountered earlier, as he referred to his recent motion for acquittal, which he submitted on September 30. 

Storm’s legal case raises concerns among the crypto community 

Following his court filings, Storm mentioned that his company cannot make any adjustments or alter the Tornado Cash protocol. According to him, the crypto program is a decentralized software protocol that no one entity or actor can manage.

The Tornado Cash founder’s remarks came after he was declared guilty in August on one out of three allegations: the jury accused him of conspiring to operate a money transmission business without a license.

This followed the US District Court for the Southern District of New York’s ruling that Storm was guilty of one felony charge related to his engagement with Tornado Cash, according to reports from Inner City Press.

The ruling caused tension in the crypto ecosystem by raising legal concerns among open-source software developers and sending shockwaves through the crypto community.

After the verdict, legal experts discussed whether US prosecutors would pursue charges against Storm for money laundering allegations and sanctions in a new trial. 

The jury, however, got stuck during their discussion and could not find a common ground on those accusations. They could only find Storm guilty of the unlicensed money transmitter charge. 

Although Strom has not yet been sentenced, reliable sources have highlighted that other crypto-related cases, like those involving OneCoin co-founder Karl Greenwood and former FTX CEO Sam Bankman-Fried, were tried in the same district. Both the executives were found guilty and are now serving time in prison.

Recently, the Ethereum Foundation partnered with the Keyring network to fund the legal defense of Tornado Cash developers Roman Storm and Alexey Pertsev.

As part of the initiative, all proceeds from Keyring’s zkVerified vaults, a yield-generating product on the Ethereum mainnet, will be used to support the legal defense of the two developers. For the next two months, 100% of protocol fees collected from the vaults will be directed to the legal fund.

A statement on the defense legal fund’s landing page noted, “This is a joint effort with the Ethereum Foundation’s Funding Coordination Team to protect developers who build privacy-preserving technology.”

Matthew Galeotti calls for clear methods in creating laws

Regarding Storm’s case, the chief legal officer at Variant Fund, Jake Chervinsky, shared an X post pointing out that the Trump administration aims to position the US as the crypto capital of the world. With this goal in place, Chervinsky argues that it is inappropriate for the DOJ to retry any charges that caused a deadlock.

In response to the chief legal officer’s statement, Matthew Galeotti, who is currently serving as the acting assistant attorney general for the DOJ’s criminal division, released a report dated August stating that the DOJ will not pursue a retrial of Storm and would not be moving forward on any other such cases.

Speaking to the crowd at the American Innovation Project Summit, an event supporting regulatory reform and pro-crypto laws in the US, Galeotti expressed that they believe merely writing code without bad intentions is not a crime.

He further highlighted that the department will not use indictments to develop laws. “We should not leave innovators uncertain about what could result in criminal charges,” he added. 

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