New updates on the controversial Tornado Cash legal case: computer scientist and whistleblower Edward Snowden has taken a stance on X to publicly support the developers of the cryptographic project, asking his followers to financially contribute to their legal expenses.
Alexey Pertsev, the first member of the Tornado Cash trio of programmers to be arrested, was released in April 2023 after about a year of detention.
Instead, Roman Storm and Roman Semenov, the other protocol programmers, were accused of money laundering in August 2023: the first one was released on bail while the second one is still at large.
Pertsev and Storm have a trial scheduled for September 2024.
The decisions that will be made by the judges in this dispute will set an important precedent for the context of crimes related to open source programs: privacy and legitimacy clash definitively in the most important battle of the century.
All the details below.
Summary
Founders of Tornado Cash accused of money laundering: Edward Snowden invites his followers to contribute to legal expenses
While the United States Department of Justice seeks to lock up the former managers of the mixing protocol Tornado Cash, one of the most controversial figures in the field of cybercrime, Edward Snowden, makes his appearance in this intriguing story.
The developers of the well-known privacy-oriented cryptocurrency platform, Alexey Pertsev and Roman Storm, are facing serious risks in their upcoming trial expected in September 2024 and are asking for help from their own community.
The two, together with their partner Roman Semenov who is currently on the run, have been accused of laundering 1 billion dollars and violating some sanctions imposed by the United States.
To assist the couple, who could receive a very heavy sentence, we find the former consultant of the NSA Edward Snowden, who in the past had become the protagonist of the online dissemination of some top secret documents concerning mass surveillance programs by the US and UK governments.
In particular, the computer scientist who took refuge in Russia would have urged his followers on social media X to participate in an advanced fundraising campaign by Roman Storm, aimed at supporting the legal expenses to face the September trial.
Storm, in presenting the fundraising campaign, had defined 2024 as the year that will probably define the rest of his life, quoting verbatim:
“Honestly, I’m scared. But I also hope that this community cares passionately. Please make a donation for my legal defense.”
Snowden, who shares with the Tornado Cash developer the principle of freedom of expression in the open source world, retweeted the message asking for help and adding that “privacy is not a crime“.
The legal fund, which aims to defend Storm and Pertsev from the accusations of the United States, has already raised over 350,000 dollars, in the form of cryptocurrencies or fiat currencies.
Donations are managed by JusticeDAO, a decentralized autonomous organization that is at the forefront of the effort to defend legal issues related to Tornado Cash.
The ending of this story could have an extremely important impact on future issues related to the concept of privacy on blockchain.
This is indeed the first case in the history of the internet in which OFAC attempts to treat software code as an entity or person that can be sanctioned.
The debate is still ongoing even within the cryptographic communities, where we find those who defend the nature of open source programs in an indispensable way and those who have a less extreme view and support the principles of legality above the right to privacy.
The history of the mixing protocol and the opposition of the United States
Tornado Cash is a cryptocurrency transaction privacy protocol, launched in 2019 on the Ethereum blockchain.
This is a platform that allows for anonymous transfers, obscuring the address that originated the operation and making it impossible to reconstruct the source of the funds, much like what happens with coinjoin on Bitcoin.
The mixer works in this way: a user can send a predetermined amount of tokens to the protocol (e.g. 1 ETH, 10 ETH, 100 ETH), which are “mixed” with the money offered by other users, and withdraw the same value to another address, thus hiding any type of connection with the sender.
Since it has been in operation, according to some on-chain data analysis companies, around 7 billion dollars in cryptocurrency would have passed through the platform, of which 20% would actually be linked to illicit activities.
Several hackers have used this service to clean up their cryptographic traces, including those responsible for the attacks on the Ronin Bridge, the exploiters of the Kucoin and Bitmart exchanges, and the famous North Korean group Lazarus.
The developers of the decentralized application have been prosecuted by the American prosecutor Damien Williams for not incorporating access solutions through KYC or AML as required by US law and for allowing cybercriminals to carry out illegal activities under their knowledge of the facts.
It is worth noting that since the US Department of Justice fined Tornado Cash for facilitating money laundering, some blockchain infrastructure providers such as Infura and Alchemy have censored access to Tornado Cash, making it possible to use only through custom RPC.
Many centralized exchanges currently do not accept funds coming from addresses flagged as owning Tornado Cash.
The protocol, despite the ongoing legal case, is still fully functional and managed entirely by the community.
It is clear how the Tornado Cash story divides the cryptocurrency community in two: on one side we find those who support the libertarian principles of decentralization and privacy, and on the other side those who prefer legality with law above all else.
If the accusation were to win against the protocol developers, the concept of open source could take a completely different form from what we know today, with technological progress being subject to the control of central authorities.
The wish in this context is that no judge will ever have to blame a software for the actions carried out, but rather that the judiciary will commit to uncovering the real criminals who have used the same software to commit illegitimate acts.
