Roman Storm: Prosecution almost rested
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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.
