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Federal prosecutors allege Tornado Cash founder Roman Storm moved $8 million through Binance, distributing $2.6 million each to co-founders, raising significant legal scrutiny.
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Chat logs reveal coordinated plans to establish offshore entities and acquire real estate using cryptocurrency funds, suggesting attempts to obscure financial trails.
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IRS-CI Special Agent Stephan George testified that Storm maintained control over the Binance account linked to these transactions, reinforcing prosecution claims.
Tornado Cash founder Roman Storm faces allegations of moving millions via Binance and coordinating offshore investments, with IRS testimony highlighting control over crypto funds.
Roman Storm’s Alleged $2.6 Million Transfers to Co-Founders Highlight Control Over Crypto Assets
During the ongoing trial, prosecutors presented compelling evidence indicating that Roman Storm exercised direct control over significant cryptocurrency transactions. Chat logs between Storm and Tornado Cash co-founders Roman Semenov and Alexey Pertsev disclosed messages such as, “I overloaded 8 million yesterday” and “I sent you guys 2.6 million each.” These communications suggest a coordinated distribution of funds amounting to millions of dollars.
IRS-CI Special Agent Stephan George corroborated these findings, testifying that he traced over $533,000 in USDT transferred from a Binance account allegedly controlled by Storm. The funds were dispersed across multiple wallet addresses on August 9, 2022, underscoring a complex network of transactions managed by the defendant.
Such evidence challenges the defense’s narrative by illustrating Storm’s active role in managing and allocating Tornado Cash’s financial resources, which is central to the prosecution’s argument regarding illicit fund movement.
Offshore Entities and Real Estate Purchases Signal Attempts to Obscure Crypto Transactions
Further examination of chat logs revealed explicit instructions from Storm to open offshore accounts and purchase real estate using cryptocurrency proceeds. One message directed a colleague to “Give her a task to f**ing open various offshores… and to buy real estate.” This indicates a strategic effort to convert digital assets into tangible investments, potentially to mask the origin of funds.
Additionally, a message from co-founder Semenov stating, “I will send some TORN later, to avoid getting busted,” was presented to illustrate awareness of legal risks and an intent to circumvent regulatory scrutiny. These communications provide insight into the operational tactics allegedly employed by Tornado Cash’s leadership to evade law enforcement detection.
User Behavior and Technical Aspects of Tornado Cash Under Scrutiny
Expert testimony from Philip Werlau of AnChain.AI highlighted that 96.2% of Tornado Cash users accessed the platform via its web interface rather than command-line tools. This behavior shifted notably after US sanctions were imposed, with certain groups like the Lazarus Group reportedly adopting command-line usage to reduce traceability.
However, the defense contested these findings, emphasizing the immutability of Tornado Cash’s smart contracts since May 2020. They argued that neither Storm nor the decentralized autonomous organization (DAO) could alter contract pools, and that the platform’s user interface did not directly control transactions, which occur on the Ethereum blockchain.
This technical debate underscores the complexity of attributing control and responsibility within decentralized protocols, a key point in the defense’s strategy.
Legal Proceedings and Upcoming Trial Developments
The prosecution is anticipated to conclude its case imminently, with a pending hearing on expert testimony from Chainalysis expected to further clarify transaction tracing methodologies. Storm’s defense team is preparing to emphasize the platform’s decentralized nature and the limitations of Storm’s control post-deployment.
Judge Failla has cautioned the jury regarding the evidentiary weight of certain emails introduced during the trial, maintaining strict adherence to factual evaluation. The trial continues to attract significant attention due to its implications for cryptocurrency regulation and the legal responsibilities of protocol developers.
Conclusion
The Tornado Cash trial presents a pivotal examination of cryptocurrency governance, legal accountability, and the challenges of regulating decentralized finance. Evidence presented by federal prosecutors suggests Roman Storm exercised substantial control over millions in crypto assets, while the defense highlights the technical immutability of the platform. As the trial progresses, its outcome may set important precedents for how decentralized protocols and their founders are held accountable under US law.
