The US Department of Justice’s stance against Roman Storm’s motion for dismissal, the developer of Tornado Cash, has raised worries in the crypto market.
In a court filing on April 26, the DOJ explained why it believes the Tornado Cash co-founder should be held accountable for the alleged crimes.
Crypto Community Alerted at DOJ’s Opposition
The DOJ had accused developers Roman Storm and Roman Semenov of several charges related to creating Tornado Cash, a crypto-mixing service. The charges include conspiring to commit money laundering, operating an unlicensed money transmitter, and violating sanctions imposed by OFAC.
Due to the severity of these allegations, the authorities said that the jury should determine the nature of Tornado Cash’s service. It further argued against Storm’s attempt to dismiss the indictment by presenting his version of the service’s operation.
Moreover, due to a lack of fund control, the authorities challenged Storm’s claim that Tornado Cash was not a money-transmitting business. The DOJ asserts that controlling funds is not a prerequisite for being deemed a money-transmitting business.
“The definition of ‘money transmitting’ in Section 1960 does not require the money transmitter to have ‘control’ of the funds being transferred. The definition exends to ‘transferring funds on behalf of the public by any and all means,'” The DOJ legal team stated.
Read more: What Are Crypto Mixnets? A Look At Improving Privacy In Web3
This DOJ stance has stirred concerns within the crypto industry. Several community experts warned that the outcome of the Tornado Cash case could significantly impact the sector. Custodia Bank’s CEO, Caitlin Long, highlighted the DOJ’s broadened definition of money transmitters as a “shift” that contradicts existing FinCEN guidance.
Amanda Tuminelli, Chief Legal Officer of Fund DeFi, also criticized the DOJ’s position. The lawyer pointed out technical inaccuracies and misapplications of law in the filing.
“The DOJ’s opposition to Roman Storm’s motions to dismiss and suppress evidence in the Tornado Cash case is filled with technical inaccuracies, obvious disdain for privacy and emerging technology, and misapplication of the law,” Tuminelli added.
Similarly, Freedom.Tech editor Seth suggested that the government aims to target self-custody in the long term. He cited instances from the DOJ’s opposition that indicate this intention.
“It seems clear to me in reading through this that the DOJ seeks to widen the net on what can be considered an MSB, allowing them to apply the subsequent regulations (and potential prosecution) to apply to anyone who makes it easier to use cryptocurrency, especially if any level of privacy is involved,” he concluded.
Meanwhile, this community backlash against the DOJ comes as the US government escalates its enforcement efforts against crypto. Last week, BeInCrypto reported that the authorities arrested the co-founders of Samourai Wallet, a crypto mixer.
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