The bedrock of the United States law is its Constitution, in which the First Amendment protects the Freedom of Speech. Speech comes in all forms, and one of the most prolific forms of speech in modern days is code.
In late March, the defense team for Roman Storm, co-founder of crypto mixer Tornado Cash, submitted the motion claiming the charges brought against him by the enforcement agency were a violation of his most basic, most protected freedom - the freedom of speech. On Friday, April 26, the Department of Justice submitted a memo to the courts rejecting that motion.
Storm lawyers' request to dismiss the case, filed at the southern district of New York court last month, is built on the argument that the DOJ counts brought against the developer impinged on his freedom of speech. They claim the DOJ seeks "to criminalize the development and publication of code and the maintenance of a website that provided open-source software."
In response, the government body claims that the defense's definition of the services that the non-custodial protocol provided is too narrow and that it ignores "the actual functioning of the overall service as alleged in the Indictment." These features include a website, a user interface, smart contracts, including the Tornado Cash pools, and a relayer network.
The DOJ sanctioned Tornado Cash in August 2022 on the grounds that it operated as an international money-laundering service facilitating the transfer of illicit and criminal funds.
One year later, the agency charged the platform's co-founders, Roman Storm and Roman Semenov, on three counts: Conspiring to commit money laundering, conspiring to operate an unlicensed money-transmitting business, and conspiring to violate the International Emergency Economic Power Act (U.S. sanctions).
While Semenov is at large, Storm has been moving mountains to be free of the charges brought against him. He has not been alone.
In January, activist group JusticeDAO launched a campaign to help fund the developer's legal defense ahead of the court trial scheduled for September 2024. The group claims the criminal charges brought against the co-founders are an attack on the right to publish code and the right to financial privacy, thereby representing a defining moment for the regulation of crypto and blockchain-based products and services in the country.
Industry leaders and privacy advocates have shown support for the narrative of Storm's defense.
NSA whistleblower Edward Snowden has pleaded with his social media followers to support the cause, Ethereum co-founder Vitalik Buterin has donated to it, and crypto-exchange Coinbase has publicly and financially defined itself as one of its key supporters. Co-founder of Bankless, Ryan Sean Adams, has called the case a "battle for our fundamental freedom to write software and keep our data private."
According to the DOJ, the rhetoric about financial privacy on the blockchain is not relevant since "nothing in this case indicates that cryptocurrency mixing services themselves are illegal." The process, says the agency, solely suggests that crypto mixers must be subjected to the same regulations as other financial services.
As regards the notion that the legal counts are an attack on freedom of speech, the memo asks the judge to reject the idea that the Tornado Cash co-founders are poster children of blockchain projects' freedom to write code.
The agency maintains that the case it filed against Storm is not about the writing of open software. The charges, it stated, are against the founders' role in operating a full-fledged money-laundering service of which they were "fully aware of the criminal funds flowing through the Tornado Cash service, and yet continued to operate the Tornado Cash service, facilitate transactions involving criminal proceeds, and reap profits from this conduct."
The crypto community and supporters of Tornado Cash founders were deeply unsatisfied with the updates on the case.
Several criticisms were directed at the government agency, as well as reflections on what the developers did wrong, things that could be improved by the next generation of coders. Amongst the buzz, it was noted that while the country's Securities and Exchange Commission is often criticized for its enforcement actions, the Department of Justice attempting to regulate a new industry with a criminal case creates a hostile legal ground for innovators. This can have a negative impact on the U.S. tech industry as a whole and threaten its international dominance.
