As the government rested its case in the trial of Roman Storm, co-founder of Tornado Cash, the defense team called Ethereum core developer Preston Van Loon as their first witness. Storm faces charges of money laundering, conspiracy to operate an unlicensed money transmitting business, and conspiracy to violate U.S. sanctions, all stemming from his involvement with Tornado Cash. The prosecution's case, which lasted approximately two weeks, centered on the claim that Storm had control over funds moved through Tornado Cash and that the platform facilitated illicit transactions.
Van Loon testified that Tornado Cash is a "privacy tool for Ethereum". He further stated that he personally used the service in 2019 or 2020 to transfer 43 ETH, worth over $160,000 today, citing concerns over personal safety. "If hackers know the scope of my assets, I can become a target," Van Loon told the jury. His testimony supports the defense's argument that Tornado Cash is a legitimate tool with potential benefits for privacy and security.
The prosecution challenged Van Loon's testimony during cross-examination, questioning his personal ties to Storm and asking why he hadn't used platforms like Coinbase instead. This line of questioning suggests the prosecution aimed to undermine Van Loon's credibility as a neutral expert and highlight alternative, regulated services.
Prior to Van Loon's testimony, IRS Special Agent Stephan George testified that Storm appeared to have control over certain funds linked to Tornado Cash. George's claim was based on blockchain transaction analysis and internal communications among the co-founders. He stated he reviewed blockchain data involving transactions linked to Crypto.com and Binance. According to Inner City Press, George said that Storm had control over funds after an account connected to Binance sent crypto to Tornado Cash smart contract addresses, based on communications between Storm, Alexey Pertsev, and Roman Semenov.
The defense team has signaled plans to file a motion for a mistrial, arguing that their investigation found no evidence linking a $250,000 loss reported by Hanfeng Leng in a 2021 "pig butchering" scam to any transfers through Tornado Cash. Leng testified she lost crypto in the scam and believed the funds passed through Tornado Cash.
The defense is expected to call additional witnesses, including two or three doctors and possibly an expert from Chainalysis. Storm's legal team also filed a request to modify the jury instructions, asking the judge to clarify the relationship between Tornado Cash and the North Korean-linked hacking group, Lazarus Group.
The outcome of the trial could have significant implications for the cryptocurrency industry, potentially setting precedents for future cases involving decentralized applications and the legal liabilities of developers. Judge Katherine Failla referenced other recent crypto cases, including that of former FTX CEO Sam Bankman-Fried, who received a 25-year sentence earlier this year.
