Concerns Raised Over Tornado Cash Evidence in Roman Storm’s Trial
Roman Storm, co-founder of the cryptocurrency mixer Tornado Cash, is on trial facing serious charges, including conspiracy to launder funds, violation of sanctions, and operating an unlicensed money transmission service. His legal team is contemplating a potential mistrial following challenges to the validity of crucial evidence presented by prosecutors during the first week of proceedings.
Central to the controversy is the testimony of Hanfeng Ling, who claims to have lost about US$250,000 (approximately AU$383,600) to a pig-butchering scam in 2021. Ling alleges that a private cryptocurrency recovery firm named Payback traced her funds to Tornado Cash and advised her to contact the service. Prosecutors contend that Ling’s email correspondence with Tornado Cash went unanswered, implying illicit activity. However, Storm’s defence asserts that they found no evidence suggesting Ling’s funds ever interacted with the platform.
Blockchain expert Taylor Monahan has publicly challenged the accuracy of the tracing conducted by Payback, labelling it “incompetent.” Monahan provided a detailed analysis indicating that Ling’s funds were directed to NTU Capital, the criminal operation responsible for the scam, rather than Tornado Cash. This assertion was corroborated by other blockchain investigators, casting further doubt on the prosecution’s claims.
In court, Storm’s attorney, David Patton, expressed confidence that the prosecution had vetted the link, but FBI agent Joel DeCapua revealed he had not been instructed to verify the transaction history and was thus unable to authenticate the theory that the funds went through Tornado Cash. The prosecution maintains that additional testimony from the IRS will link Ling’s assets to Tornado Cash through “a few short hops.” However, Judge Katherine Failla admitted her lack of technical knowledge limited her ability to evaluate the tracing evidence’s credibility.
The trial commenced on 14 July and is projected to extend for up to four weeks. If convicted, Storm faces a potential sentence of up to 45 years in prison. Prosecutors allege that he developed Tornado Cash knowingly as a vehicle for laundering cryptocurrency, including funds associated with North Korea’s Lazarus Group.
Given the growing scrutiny over the tracing evidence and the possibility of a mistrial, this high-stakes case highlights the complexities and legal ambiguities surrounding cryptocurrency operations and regulatory compliance.
Key Points:
- Roman Storm’s defence is disputing the evidence linking funds to Tornado Cash, suggesting possible grounds for a mistrial.
- The prosecution’s key witness, Hanfeng Ling, claims her lost funds were traced to Tornado Cash, but Storm’s lawyers argue this is incorrect.
- Blockchain analyst Taylor Monahan has dismissed the tracing as flawed and highlighted the actual destination of funds.
- An FBI agent confirmed he had not verified the tracing claims, and the judge admitted to being unable to assess the evidence’s validity due to technical constraints.
- Storm is facing severe charges that could lead to a lengthy prison sentence if convicted. The trial has significant implications for the future of cryptocurrency regulation.
