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Tornado Cash Accused of Assisting North Korean Hackers in Money Laundering
The U.S. Department of Justice has accused Tornado Cash, a decentralized, open-source cryptocurrency mixing tool co-created by Roman Storm, of being widely misused by hackers, becoming a hotspot for money laundering. Prosecutors claim that the platform has aided in laundering over $1 billion in funds, including millions of dollars transferred by the sanctioned North Korean hacking group Lazarus Group.
In closing arguments, the prosecutor stated that Roman Storm not only knew about the platform’s misuse by hackers but also profited millions of dollars from it, effectively condoning the ongoing illegal activities.
Defense Emphasizes: Storm Did Not Actively Encourage Hackers
In contrast, Roman Storm’s defense attorney emphasized that the defendant never encouraged or actively assisted hackers, and upon learning that North Korean hackers were using Tornado Cash, the team was shocked and emotional, stating, “It was by no means a cause for celebration,” and certainly not a malicious intent to participate.
The attorney further asserted that Roman Storm merely developed a neutral privacy tool and should not face criminal liability for the improper use of that open-source tool.
Crypto Developer Community Stands in Support
Roman Storm’s predicament has sparked widespread controversy within the cryptocurrency community. The DeFi advocacy organization DeFi Education Fund issued a statement indicating that this case poses a threat to all open-source developers, as it distorts the lines of responsibility that developers should have in non-custodial protocols:
“Our position is clear: developers of peer-to-peer protocols do not control user assets and do not constitute financial institutions in the traditional sense, and should not be regarded as illegal remittance operators.”
Ethereum co-founder Vitalik Buterin also expressed his support for Storm on X (formerly Twitter) in January, emphasizing that he was the one who suggested developing Tornado Cash, stating:
“At Ethereum, we guard each other’s honor, and we will not leave our own to face the storm alone.”
Tornado Case May Become a Turning Point for Open Source Developers
The partial guilty verdict in this case has drawn attention from many developers and legal observers regarding its potential consequences. Particularly, just days ago, two founders of another mixing tool, Samourai Wallet, chose to plead guilty to similar charges, indicating that U.S. judicial authorities are tightening the boundaries of whether “cryptocurrency mixing tools constitute financial institutions.” With the ongoing sentencing of Roman Storm and the potential re-examination of two other charges, it remains to be seen whether this case will become a critical judicial watershed for open-source cryptocurrency developers.
