Paradigm has filed an amicus brief in federal court arguing that Tornado Cash co-founder Roman Storm cannot be convicted without proof that he knowingly operated a money-transmitting business. In its June 13 filing made public on Monday, Paradigm requested that the court instruct the jury that for Storm to be convicted under federal money transmission laws, there must be clear evidence that he knowingly operated a business that controlled user funds, charged fees for transactions, and knowingly processed funds tied to criminal activity. Paradigm argued that the prosecution’s theory ignores longstanding FinCEN guidance, including 2019 statements issued under the Treasury Department clarifying that developers without control over funds are not money transmitters. “Subjecting a software developer to criminal liability under § 1960 for others’ independent actions, when the software developers had no control over any funds and their only ‘operation’ was creating immutable open-source code, would be as absurd as prosecuting a television manufacturer for state secrets being divulged on-air,” the brief stated. According to the brief, Storm’s role was limited to publishing open-source, self-custodial software. In an accompanying blog post , Paradigm’s chief legal officer Katie Biber and general counsel Gina Moon warned that allowing the charge to proceed could “let unelected prosecutors change the plain meaning of criminal statutes” and threaten people with imprisonment “even if they are following widely-disseminated and accepted regulatory guidance.” You might also like: Paradigm-backed AI startup Succinct launches token to transform contract analysis Industry executives have echoed Paradigm’s concerns in recent months. Paradigm co-founder Matt Huang previously signed a public letter calling for the case to be dismissed. Ethereum core developer Tim Beiko and Bankless co-founder Ryan Sean Adams were among over 250 signatories urging President Trump’s administration to intervene and halt what they described as regulatory overreach. The DeFi Education Fund, which authored the April 28 petition, has argued that the Department of Justice’s approach threatens to criminalize “code-writing itself.” The prosecution has become a flashpoint in ongoing debates over how U.S. law treats open-source development. During Congressional hearings earlier this month, lawmakers raised similar concerns while reviewing the Digital Asset Market Clarity Act. Storm’s legal battle began in August 2023, when U.S. authorities charged him with conspiracy to facilitate money laundering, conspiracy to operate an unlicensed money transmitter, and violating U.S. sanctions. He faces up to 45 years in prison if convicted. Storm’s trial is scheduled to begin on July 14 in the U.S. District Court for the Southern District of New York. Read more: Paradigm leads $82m raise for crypto payments firm Mesh
