Tornado Cash’s co-founder Roman Storm has received support from venture capital firms Paradigm, and Electronic Frontier Foundation. He is facing prosecution in the U.S. over allegations that he facilitated money laundering by using the Ethereum-based cryptocurrency mixer.
Paradigm has announced it will donate $1.25million to Storm’s legal defence, and the EFF filed an amicus brief on behalf of the developer.
Matt Huang, Paradigm founder and co-founder, announced that Paradigm would contribute to Storm’s legal funds. He called the accusations an assault on software engineers.
"The prosecution’s case threatens to hold software developers criminally liable for the bad acts of third parties, which would have a chilling effect in crypto and beyond," Huang tweeted this.
Paradigm has donated $1.25 million to fund Roman Storm’s legal defense
It is a serious concern that the prosecution could hold software companies criminally accountable for third-party bad behavior, which has repercussions in other industries as well.
We must stand with @rstormsf https://t.co/OvPHNYeGFD
— Matt Huang (@matthuang) January 28, 2025
Storm has expressed appreciation for Paradigm and its contribution. "enormous gratitude” to the VC firm in a tweet. He added that, “Your support means the world, not just to me, but to every developer fighting for fairness and innovation. Thank you for believing in me and defending the principles that matter!"
Civil liberties nonprofit Electronic Frontier Foundation (EFF), meanwhile, has filed an amicus brief in support of Storm, warning that his prosecution could stifle privacy-focused software development.̉
"The EFF pointed out that holding developers responsible for how their tools are used is an overreach, comparing privacy protocols like Tornado Cash to physical cash or encryption tools that serve legitimate purposes but can also be misused," The EFF has written.
The following is added: "The government’s prosecution raises larger civil liberties concerns that could chill the future development of privacy-enhancing technologies more broadly."
This report also criticized using the International Emergency Economic Powers Act in the case. It said that Congress should have enacted laws regulating these technologies, and not by interpreting existing sanctions law broadly.
Decrypt We have reached out to EFF and asked for their comments. If they respond, we will update the article.
Tornado Cash – The prosecution
The U.S. Department of Justice charged Tornado Cash’s founders Roman Storm, Roman Semenov, with money laundering and sanctions violations. They also accused them of operating an illegal money-transfer business.
The outcome of Storm’s case, which is set to be heard on April 14, 2025 could have wide-ranging implications for software and financial privacy.
Tornado Cash is facing a new legal landscape.
A New York court refused Storm’s motion for dismissal of his charges in September. The judge stated that, while some aspects of Tornado Cash could not be changed, others were still under the developer’s control.
Last week, however, the Texas Court dealt a major blow to regulators by overturning the U.S. Treasury’s sanctions against the Coin Mixer, ruling that smart contracts with immutable code do not meet the definition of a cryptocurrency. “property” Under the IEEPA.
It follows on from a similar decision in November of 2024 by the U.S. Fifth Circuit Court, which found that sanctioning smart contracts immutable exceeded Treasury’s legal jurisdiction.
Stacy Elliott is the editor.