Brian Klein and Keri Axel Argue Issues of First Impression in Criminal Prosecution of Tornado Cash Co-Developer Roman Storm

On July 12, 2024, appearing before Judge Failla of the Southern District of New York, Waymaker partners Brian Klein and Keri Curtis Axel argue that the prosecutors case against their client Roman Storm, one of the Tornado Cash developers, should be dismissed.

They explained to Judge Failla that Mr. Storm had no control of the Tornado Cash protocol and could not have stopped third-party bad actors from later using the software for their own purposes. They also noted that the Bank Secrecy Act did not cover Mr. Storm’s alleged conduct of helping to write the protocol’s code, and that the attempt to apply the money laundering and sanctions laws to the alleged conduct was prosecutorial overreach and a violation of the First Amendment and Due Process rights.

While prosecutors claimed that Mr. Storm not only created a software but also controlled a service, Waymaker explained that he merely developed a privacy software for financial transactions that he released to the world for anyone to use. Waymaker also explained that Mr. Storm had no control of Tornado Cash after May 2020 when the protocol became immutable.

Klein said, “This is the only [money laundering] case ever where the defendant didn’t have control over the funds.” Axel pointed out that Tornado Cash’s user interface did not in itself control the transactions that users sent around. “They [the developers] are not connected to those transactions.” Comparing the prosecutors claims against Mr. Storm to other sanctions prosecutions, Axel noted that the defendants in every other case had some connection to the sanctioned regime, while Mr. Storm did not, stating that “we are nowhere close to [anyone] willfully providing services to the DPRK.”

As reported by Coindesk, Judge Failla was skeptical of some of the prosecution’s arguments. When one of the prosecutors on the case argued that any “legitimate business” that becomes aware of criminal activity is required to take steps to stop it, Judge Failla responded, “That’s a lot. I’m not sure what you expected Mr. Storm and his colleagues to do.” Later Judge Failla said, “I don’t see you charging WhatsApp,” an encryption software that criminals sometimes use.

Waymaker counsel Kevin Casey is a member of the Waymaker team and argued the constitutional issues presented by the defense motions to dismiss.