Venture capital firm Paradigm has stepped into the high-profile legal case involving Tornado Cash co-founder Roman Storm by filing an amicus brief in a New York district court. The firm argues that the jury must be clearly informed about what constitutes a money-transmitting business under U.S. law, a key factor in Storm’s prosecution. Filed on June 13, the brief emphasizes that in order for Storm to be convicted, the government must prove that he knowingly operated a money transmission service. This would include charging fees, actively transmitting funds for others, handling criminal proceeds knowingly, and having control over those funds—all of which Paradigm claims are absent in Storm’s case. Tornado Cash is a decentralized, non-custodial crypto protocol designed to improve privacy in transactions. Since developers do not hold user funds, Paradigm argues that Storm’s role does not meet the legal definition of a money transmitter . Software Developers at Risk of Misinterpretation: Paradigm In a blog post, Paradigm’s chief legal officer Katie Biber and general counsel Gina Moon highlighted how the government’s interpretation conflicts with well-established legal standards. Citing guidance issued during the Obama administration in 2014, they noted that creating and publishing code does not equate to transmitting funds. In 2019, further clarity was offered: only those with independent control over users’ crypto holdings could be considered money transmitters. Biber and Moon caution that permitting prosecutors to reinterpret these definitions could set a dangerous precedent. “It allows unelected officials to rewrite criminal law and punish individuals even if they followed clearly communicated guidance,” they noted. The U.S. government charged Roman Storm and co-founder Roman Semenov in August 2023, accusing them of facilitating over $1 billion in money laundering through Tornado Cash. However, one conspiracy charge was dropped in May 2024 following a Justice Department memo clarifying that crypto mixer developers should not be prosecuted based solely on user actions. Broader Implications for Innovation Paradigm’s brief argues that the case has far-reaching implications beyond the crypto sector. If Storm is found guilty, it could deter open-source developers, AI engineers, and other technologists from contributing to projects out of fear of prosecution based on how their tools are used. They likened the logic behind the charges to punishing a wallet maker for stolen money or Apple for conversations over an iPhone. The trial is set to begin on July 14. The post Paradigm Defends Tornado Cash Co-Founder Roman Storm in Landmark Crypto Case appeared first on TheCoinrise.com .
