Prosecutors opened their case against software developer Roman Storm on Tuesday by questioning a Taiwanese woman living in Georgia who was scammed out of tens of thousands of dollars in crypto.
According to court documents, that crypto was eventually laundered through Tornado Cash, the controversial crypto mixer Storm built with two colleagues in 2019.
The woman’s testimony, as well as opening statements from both sides, marked the true beginning of a trial that will be closely watched by the crypto industry.
Crypto proponents, as well as a leading civil liberties organisation, have said that Storm is being unjustly prosecuted for the mere act of writing code, and that a guilty verdict will discourage future development of privacy-enhancing software.
Prosecutors have charged Storm with conspiracy to commit money laundering, conspiracy to operate an unlicensed money-transmitting business, and conspiracy to violate US sanctions. He faces more than 40 years in prison.
The trial formally began Monday, when attorneys began to whittle down a pool of potential jurors.
On Tuesday, they settled on a group of 12 jurors, who skew young and well-educated — 10 are younger than 50, and five are younger than 30. Nine have a college degree.
Judge Katherine Polk Failla told the jurors the trial is expected to last about three weeks — a more modest estimate than the four weeks she predicted on Monday.
Nevertheless, opening statements from the government and the defense hinted at the complexity of testimony to come.
“The defendant was running and profited from a giant washing machine for dirty money — and he knew it,” Assistant US Attorney Kevin Mosley.
Like all major blockchains, Ethereum is a public ledger. Tornado Cash cloaks the flow of crypto on Ethereum. It became popular with privacy-conscious crypto users — and cybercriminals, including hackers affiliated with North Korea.
Several people who lost crypto to hacks and scams contacted Storm to ask for help, according to Mosley.
“What was the defendant’s response? He said there was nothing he could do,” the prosecutor said.
“This, ladies and gentlemen, was a lie.”
The Tornado Cash protocol is largely immutable — that is, it can’t be modified by anyone, including its creators.
That’s because Storm and his co-founders effectively threw away the keys to the protocol in 2020, an act that Mosley appeared to refer to in his opening statement.
But Mosley suggested Storm’s control of the protocol itself — or lack thereof — was beside the point, as Storm operated “the parts that most people, including the North Koreans, used.”
It appeared to be a reference to a website created by Storm and his co-founders. That website made it much easier for non-technical people to use the Tornado Cash protocol.
Keri Axel, an attorney for Storm, said his operation of that website was irrelevant, as technically adept hackers and scammers wouldn’t need a user-friendly interface to access the Tornado Cash protocol.
“Anyone who is sophisticated enough to hack these protocols is sophisticated enough to find these pools on their own,” she said.
Tornado Cash is “a legitimate software project backed by US investors,” Axel told the jurors. Most of its users were normal people seeking privacy on Ethereum.
“How would you feel if someone took your bank account and published it on the internet?” she said. “You would not feel very safe.”
The first witness of the trial, a court translator from Cummings, Georgia, said she lost about $200,000 to a scammer who had contacted her on WhatsApp and convinced her to invest in crypto.
Prosecutors plan to bring additional witnesses who fell victim to — or perpetrated — a hack or scam in which the pilfered crypto eventually disappeared into Tornado Cash.
Their planned appearances have frustrated Storm’s attorneys, who said in court filings before the trial that testimony from alleged victims and cybercriminals was “irrelevant” and likely to “confuse the jury.”
“Roman had nothing to do with any of the hackers or scammers,” Axel said Tuesday.
Aleks Gilbert is DL News’ New York-based DeFi correspondent. You can reach him at [email protected].
