Tornado Cash Trial: Examining Cryptocurrency Laundering Accusations
During the trial of Roman Storm, a co-founder of the cryptocurrency mixer Tornado Cash, jurors encountered a barrage of technical terms—validators, relayers, private keys, self-custody, smart contract logic—as prosecution witnesses sought to establish Tornado Cash’s alleged role in facilitating money laundering for cybercriminals.
Participants in Wednesday’s testimony included Viet Anh Ho, Chief Technology Officer at Axie Infinity developer Sky Mavis, and Andre Llacuna, 23, who co-executed an $1.1 million NFT scam that took advantage of Sky Mavis employees. Their accounts were part of the prosecution’s strategy to link Tornado Cash usage to criminal activity.
Prosecution Testimony
Sky Mavis CTO Ho detailed how North Korean-affiliated hackers compromised a company employee by tricking them into installing malware. This led to the theft of over $600 million in cryptocurrency from a bridge connecting Ethereum and Sky Mavis’ blockchain; the stolen crypto was allegedly laundered via Tornado Cash.
Llacuna testified about his 2022 fraud scheme. As a then-hairdresser, he created “Frosties” NFTs and hyped the project, promising a video game and other benefits. They sold all 8,888 Frosties for $1.1 million. Promptly shutting down their communication channels, Llacuna noted the difficulty in obscuring the proceeds: “It was obvious to us that… it would still be traceable.” One partner suggested Tornado Cash, adding, “It seemed like the best option for us to hide the money and get away with it.” Llacuna pleaded guilty to fraud but testified proactively to seek leniency.
Tornado Cash supporter Justin Bram explained how the protocol works, having previously made an educational video and offered to co-manage funds for the platform. He cited the evolving regulatory environment as his reason for disassociating in 2021, acknowledging bad press from “hackers sending money,” while also defending Tornado Cash’s utility for user privacy, denying Storm’s alleged involvement in promoting illicit use.
Defense Arguments
Tornado Cash’s defense lawyers aimed to position the protocol as privacy software misused rather than engineered for illegal purposes, pointing out Storm’s ability to easily find it online, not requiring restricted access.
A significant point for the defense is the timing: In 2022, the US sanctioned Tornado Cash, effectively making its use illegal for US citizens. However, these sanctions were lifted in late 2023 by a federal appellate court, ruling the government lacked authority over owner-less software fulfilling a valuable privacy function. The defense contends Storm still faces a “grave injustice” by being tried without this legal status change formally impacting other years.
Community Support
The trial drew substantial solidarity from the crypto community. Supporter Clancy, after flying from Boston, contributed significant funds for Storm’s defense and presented a rare copy of “PGP: Source Code and Internals,” a book associated with Philip Zimmermann, whose own 1990s PGP work targeted by US authorities resonates with the Tornado Cash case. Clancy plans to auction the signed book with proceeds benefiting the defense, emphasizing they don’t want Storm to be a “martyr,” hope, he added.
