TLDR

  • Roman Storm’s lawyers claim prosecutors hid key FinCEN communications

  • FinCEN reportedly stated Samourai Wallet likely wasn’t a money transmitter due to non-custodial nature

  • Defense argues this undermines the government’s case against Tornado Cash

  • Newly surfaced details from the Samourai Wallet case support Tornado Cash’s defense

  • Storm’s trial is scheduled for July 14 despite a judge ruling against re-sanctioning Tornado Cash

Roman Storm’s legal team has filed a motion accusing federal prosecutors of misleading the court about how US law treats non-custodial cryptocurrency mixers. The motion, filed on Friday, claims that prosecutors withheld key communications with the Financial Crimes Enforcement Network (FinCEN) that could undermine the government’s central claim against Tornado Cash.

The defense team points to an August 2023 call between prosecutors in the Southern District of New York and senior FinCEN officials. This call was only recently revealed in a related case against Samourai Wallet developers.

During this call, FinCEN reportedly stated that because Samourai Wallet never took custody of user funds, it likely did not qualify as a money services business. This designation carries heavy regulatory requirements under US law.

Storm’s attorneys argue this information is crucial to their client’s defense. They highlight that Tornado Cash, like Samourai Wallet, is a non-custodial crypto mixing protocol where users maintain control of their assets at all times.

“The government, at a minimum, misled this Court under relevant FinCEN guidance,” the defense filing states. They add that prosecutors’ earlier arguments caused the court to deny a motion to dismiss and reject a request for FinCEN-related discovery.

Legal Implications for Crypto Privacy Tools

The defense team is now asking the court to compel the government to disclose all communications with FinCEN. They also want related materials from the Samourai Wallet case.

Storm’s lawyers argue that the withheld FinCEN communication supports their position that Tornado Cash is not a money transmitting business under federal law. This distinction is critical to the legal framework surrounding cryptocurrency privacy tools.

Prosecutors have already dropped one of two charges tied to money transmitting business rules. This followed new Department of Justice guidance discouraging enforcement against crypto mixers.

However, Storm’s defense argues the FinCEN call remains relevant to the remaining counts. These include conspiracy to launder money and violate sanctions.

In a related development, Federal Judge Robert Pitman issued a ruling on April 28. This ruling denied the Office of Foreign Assets Control (OFAC) the ability to reimpose sanctions on Tornado Cash.

This ruling potentially sets a legal precedent for non-custodial mixer cases. Despite this favorable ruling for the crypto privacy protocol, US federal prosecutors are moving ahead with the modified case against Storm.

Storm’s attorneys claim in their letter to Judge Katherine Polk Failla that the FinCEN documents clearly show non-custodial crypto mixers do not fall under the legal definition of a “money transmitting business.” They allege prosecutors have known this since at least 2023 but proceeded with cases against both Samourai Wallet developers and Tornado Cash regardless.

US prosecutors have denied withholding evidence. They claim they submitted the FinCEN communications within the stipulated timeframe during legal discovery.

Roman Storm’s trial is scheduled to begin on July 14, 2025.

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