Judge Blocks Key Case from Roman Storm’s Tornado Cash Trial—Here’s the Shocking Reason
A federal judge just dropped a legal bombshell—one critical case won’t see the light of day in Roman Storm’s upcoming Tornado Cash trial. And the reason? It’s juicier than a Wall Street insider tip.
The Gag Order No One Saw Coming
The court’s move sidelines what could’ve been a pivotal argument for Storm’s defense. Legal experts are calling it a tactical nuke—one that might tilt the scales before the jury even hears opening statements.
Privacy Tech vs. The Feds: Round 2
This isn’t just about one developer. The decision rips open old wounds in the crypto world’s favorite debate: When does privacy become a problem? (Spoiler: Always, if you ask the SEC.)
The Fine Print That Changes Everything
Insiders whisper the excluded case could’ve set a precedent—maybe even rewritten the playbook for decentralized tech prosecutions. Now? Storm’s team will need a Hail Mary pass.
As the trial date looms, one thing’s clear: The outcome won’t just decide one man’s fate. It’ll send shockwaves through every crypto startup still naive enough to think ‘regulation’ won’t kill their buzz.
“Mental gymnastics”
Dhrupad Das, Web3 lawyer and founding partner at Panda Law, explained that Judge Failla may have barred mention of the Van Loon ruling for three evidence-law reasons.
“Judge Failla excluded references to the Van Loon judgment during Roman Storm’s trial primarily because it dealt with civil interpretations of OFAC’s authority under IEEPA, not criminal liability,” Das told Decrypt.
"A Fifth Circuit judgment does not bind a Second Circuit district court" and its legal conclusions "could only be offered as persuasive authority, which is material for motions, not for the jury,” he said.
Das noted that in ruling on the defense motion in limine, Failla said jurors would need "mental gymnastics" to follow why OFAC sanctioned Tornado Cash, why those sanctions were later withdrawn, and how a Texas court then held them unlawful.
"She concluded that the limited probative value of that story was outweighed by the danger it would distract or mislead," he added.
What is Tornado Cash?
Founded in 2019 by Alexsey Pertsev and Roman Storm, Tornado Cash is a non-custodial coin mixer servicing the Ethereum network. Coin mixers are services that enable users to mask the origin and destination of transactions—making them a key battleground in the clash between privacy advocates and the authorities.
Storm’s trial marks the culmination of a three-year legal battle that began in August 2022, when the OFAC sanctioned Tornado Cash for allegedly helping launder over $7 billion, including funds tied to North Korea’s Lazarus Group.
In 2023, the DOJ indicted Storm for conspiring to commit money laundering, evade sanctions, and operate an unlicensed money-transmitting business, charges now at odds with the DOJ’s new policy to drop similar cases.
Storm's legal team had hoped to leverage the Van Loon victory, which established that Immutable smart contracts cannot be classified as "property" under existing sanctions law.
While civil courts have limited the Treasury’s regulatory reach, Storm’s case hinges on whether he knowingly facilitated criminal activity through the Tornado Cash protocol.
Prosecutors point to Storm’s actions after OFAC imposed sanctions, including Google searches, a $12 million TORN token sale, and ceding control of the app, as evidence of intent.
With Tuesday’s appellate dismissal extinguishing the final civil challenge to OFAC sanctions, Storm’s defense can no longer argue immunity based on legal vacatur of the designation.
All eyes now turn to whether the jury will see his actions after the imposition of sanctions, and before delisting, as criminal. If convicted, he faces up to 45 years behind bars.
