Paradigm Files Legal Brief for Roman Storm in Tornado Cash Case

Paradigm, the crypto venture capital firm that’s no stranger to big moves, has filed an amicus curiae brief (also known as a “friend of the court” filing – fancy, right?) in support of Tornado Cash co-founder Roman Storm, who is facing charges for his involvement with the privacy-focused software.

The trial, which is set for July 14, could set a precedent for the future of software development in the U.S. – no pressure, right? Paradigm’s chief legal officer went all-in on Friday, arguing that the charges against Storm are utterly ridiculous. According to Paradigm, prosecutors are out of line claiming that Storm’s peer-to-peer cryptocurrency software is illegal money transmitting. Paradigm is having none of it, calling the government’s position “contrary to the plain text of the law, clear FinCEN guidance, and decades of case law.” Basically, Paradigm is saying, “This is all kinds of wrong.”

Storm Faces Money Laundering and Conspiracy Charges in Tornado Cash Case

The firm also took issue with the very idea that software developers like Storm are considered money transmitters. They pointed out that the Treasury Department has long recognized that developers who publish software aren’t engaging in money transmission. So, no, Storm didn’t break any laws by, you know, creating software that lets people privately send funds. How shocking.

Now, here’s where it gets a little spicy. Paradigm argued that Storm can’t be convicted unless the jury is convinced beyond a reasonable doubt that he knew the funds being transmitted were the proceeds of criminal activity. Basically, if Storm didn’t know what was going on with those funds, why is he on trial?

For those keeping score, Storm is facing charges of conspiracy to commit money laundering and violating sanctions for his role in operating Tornado Cash. He’s not exactly rolling in the cash for legal fees, either. The guy’s trying to raise $2 million for his defense, but hey, at least the Ethereum Foundation threw in a cool $500,000 to support him. Nice.

Storm’s Struggles

Storm’s recent posts on X show he’s putting everything on the line for Tornado Cash, saying, “If I lose, DeFi dies with me.” The man’s clearly invested, not just in his software, but in the entire dream of financial freedom.

While the prosecutors have dropped some of the charges (including that pesky unlicensed money-transmitting one), they’re still sticking with the money laundering and conspiracy charges. So, yeah, this isn’t over by a long shot. The U.S. Treasury’s Office of Foreign Assets Control sanctioned Tornado Cash back in 2022, but in a plot twist that no one saw coming, the sanction was lifted earlier this year.

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