5 days ago
NEW YORK — The authorities officially rested its lawsuit against Tornado Cash developer Roman Storm connected Thursday, bringing 8 days of witnesser grounds to a close.
Storm’s defence introduced its archetypal witness, Ethereum halfway developer Preston Van Loon, connected Thursday afternoon. Van Loon told the assemblage that helium was a idiosyncratic of Tornado Cash, describing it arsenic a privateness instrumentality for Ethereum that allowed radical to abstracted their identities from their money. Van Loon explained that he’d utilized the protocol for “operational information and idiosyncratic safety” to support himself from hackers and different chartless adversaries. Van Loon — who sued the U.S. Treasury Department for sanctioning Tornado Cash and won, starring to the sanctions being reversed — did not attest astir his related lawsuit, which U.S. District Judge Katherine Polk Failla banned from being discussed astatine trial.
Van Loon’s grounds was the archetypal sensation of Storm’s defence case, which volition reason that Tornado Cash was archetypal and foremost a privateness instrumentality that met a morganatic request successful the Ethereum assemblage — and that besides happened to beryllium exploited by atrocious actors. In that way, the defence has argued, Tornado Cash is akin to an encrypted messaging app oregon a virtual backstage web (VPN) oregon adjacent a hammer — which Storm’s lawyer Keri Axel, a spouse astatine Waymaker LLP pointed retired successful her opening statements, could some beryllium utilized for morganatic purposes arsenic good arsenic breaking into a home.
The defense’s witnesses, whose grounds is expected to agelong implicit 3 proceedings days, volition effort to undo the representation of Storm painted by the prosecution implicit the people of their case.
The prosecution’s lawsuit is, essentially, this: Roman Storm, on with his colleagues and alleged co-conspirators, Roman Semenov and Alexey Pertsev, owned and controlled Tornado Cash. They profited handsomely from it done their merchantability of TORN tokens. They knew that criminals, including North Korean hackers, were sometimes utilizing the protocol to launder funds. They made predominant changes to the beforehand end, oregon idiosyncratic interface of Tornado Cash, and were besides frankincense capable to alteration the quality of the protocol itself to marque it little charismatic to criminals, but didn’t. And erstwhile victims of hacks and scams reached retired to Tornado Cash asking for help, Storm told them helium couldn’t bash thing for them, which the authorities claimed Thursday was a lie.
This, the authorities has argued, constitutes a trio of conspiracies: conspiracy to perpetrate wealth laundering, conspiracy to perpetrate sanctions evasion, and conspiracy to interruption planetary sanctions — charges for which Storm, if convicted, faces up to 45 years successful prison.
The defense, meanwhile, has maintained that Storm didn’t enactment successful immoderate conspiracies due to the fact that helium didn’t cognize the criminals utilizing his software, didn’t springiness them the green-light to usage it oregon different nett from their transgression acts. At most, his lawyers told the justice connected Thursday, helium was negligent, but not criminally liable for the behaviour of Tornado Cash’s worst users.
Expert (?) witness
Through the grounds of respective “victim” witnesses arsenic good arsenic hack perpetrators, the prosecution told the assemblage however transgression proceeds flowed done Tornado Cash and past disappeared.
But 1 witnesser — a unfortunate of a wrong-number WhatsApp scam named Hanfeng Lin, who mislaid $250,000 to a pig butchering cognition – testified earlier successful Storm’s proceedings that a crypto tracing institution called Payback traced a information of her wealth to Tornado Cash. Over the weekend, however, blockchain sleuth Taylor Monahan (aka @tayvano_x) took to X to explain that Payback, and frankincense the government, had gotten the tracing wrong. Lin’s money, she said, ne'er went to Tornado Cash — a assertion that different well-respected blockchain tracers, including pseudonymous blockchain sleuth ZachXBT, besides verified.
The alleged tracing mistake led the defence to rise the anticipation of a mistrial, oregon astatine slightest the striking of Lin’s testimony. However, Failla ruled that different of the prosecution’s witnesses — Internal Revenue Service (IRS) cause Stephan George — would beryllium allowed to verify that Lin’s funds so flowed done Tornado Cash, overruling the defense’s objection to George’s instauration arsenic an adept witness.
George, a first-time adept witness, testified that helium utilized an accounting rule called “LIFO” (last in, archetypal out) to hint Lin’s funds. He admitted, upon cross-examination, that the method of tracing does not found the ownership oregon attribution of the wallets oregon funds and does not beryllium that Lin’s scammers moved her wealth done Tornado Cash.
During his cross-examination by Axel, George besides admitted that helium was unsure whether TORN tokens were “a wholly antithetic token than ETH,” saying, “It’s not a origin that I person to regularly navigate successful my work.” When asked if helium knew what Crypto.com (the speech from which the victim’s funds originated) was, the adept replied: “I person not looked into Crypto.com and what it could be.”
Next steps
Through their ain witnesses, the defence volition effort to rotation backmost immoderate of the characterizations and allegations made by the prosecution. On Friday, the defence volition telephone an adept witnesser arsenic good arsenic Columbia Business School prof Omid Malekan, who volition attest astir his usage of Tornado Cash.
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