Roman Storm: Prosecution almost rested

Federal prosecutors are expected to rest their case against Tornado Cash co-founder Roman Storm in Manhattan this week.

• If ever there has been a criminal cause célèbre in the blockchain industry, it's this one.

The big picture: The U.S. government sees Tornado Cash as a line in the sand over its ability to monitor the flow of funds as a means to stymie organized crime and terrorism financing.

• Open source developers see the project as a line in the sand over their right to create code, independent of how other people choose to use it.

The latest: The government — which charged Storm in 2023 over money laundering, operating an unlicensed money-transmitting business and U.S. sanctions violations — sought to prove that the funds from a pig-butchering case they highlighted flowed to Tornado Cash.

• The agent on the stand testified that he used the "last in, first out" accounting method.

Yes, but: Blockchain forensics experts dispute that the funds trace to Tornado Cash.

Between the lines: Accounting can be philosophically mind-bending in a criminal case.

• Think of it like this: Imagine you just poured a glass of water into a bucket of water.
• Then you pour out a little bit of the water from the bucket to the ground.
• Did you just pour out the water from the glass? Or did you pour out water that had already been in the bucket?

What we're watching: We'll expect the defense to call some of those blockchain experts to the stand, but the threat of a mistrial seems to have been averted.

The intrigue: Another witness for the government, Philip Werlau, of analytics firm AnChain.AI, testified that it would have been feasible for Tornado Cash to update its code to incorporate more anti-money laundering protections.

• It would have required a vote by token holders, though.

The bottom line: A crucial phase of this case is coming to its end.

• The defense will make its case soon.