The US Department of Justice (DOJ) opposes the motion to dismiss the charges of conspiracy and money laundering against Tornado Cash co-founder Roman Semenov. They believe that the defense has raised disputed facts that should be considered by a jury and not dealt with at an early stage. The DOJ accuses Semenov and others of conspiring to launder money, operating an unlicensed money transmitting business, and violating sanctions, alleging that entities such as North Korea's Lazarus Group used Tornado Cash for money laundering.

The U.S. Department of Justice has rejected Tornado Cash developer Roman Storm's motion to dismiss criminal charges, stating that the defense filing presented disputed facts that should be weighed by a jury. Storm and fellow developer Roman Semenov were charged with conspiring to commit money laundering, operating an unlicensed money transmitter, and violating sanctions law by creating and operating Tornado Cash, a crypto mixing service. The DOJ disputed Storm's arguments that Tornado Cash is not a custodial mixing service and that he was not able to control the service or block criminal entities from using it, providing evidence that Storm and his co-founders maintained control over the mixer. Storm is set to go on trial in September, while Semenov remains at large.

Coinbase's legal chief, Paul Grewal, published a series of articles on the X platform. Grewal admitted that the plaintiff in the "Tornado Cash" case had made a strong response to the argument made by the US Treasury Department in the Fifth Circuit Court of Appeals. According to the submitted documents, the Treasury Department needs to "prove that it has approved an association composed of people with a common purpose".Regarding the sanction proposal put forward by the Treasury Department, Grewal expressed concern about the interpretation of existing regulations, especially when it comes to open source software code. He emphasized that such code is not property, which poses a challenge to the Treasury Department's regulatory power limited to "property" involving foreign interests.Grewal believes that any attempt by the Treasury Department to regulate the use of open source software such as Tornado Cash by US citizens must be authorized by Congress. He mentioned the Treasury Department's recent call to Congress to address what it sees as regulatory loopholes related to such software.

The future of financial privacy is on trial

Roman Storm’s lawyers argued that the charges are “fatally flawed” and must be dismissed, given “there was nothing” Storm could have done to prevent sanctioned entities from using the crypto mixer.

According to Snapshot governance page on March 8th, the Arbitrum community initiated a proposal to support the legal defense of Tornado Cash co-founder Roman Storm and Tornado Cash developer Alexey Pertsev. The proposal states that Tornado Cash is a beacon of privacy and security in the cryptocurrency industry, providing users with a reliable way to conduct private transactions on the Ethereum blockchain. The goal of this proposal is twofold: to provide strong legal defense for both individuals and to uphold the right of developers to contribute to the deployment of permissionless open-source software. By rallying support for their legal fund, the aim is to protect the future of privacy-preserving technology, as well as broader principles such as innovation, decentralization, and individual sovereignty within the cryptocurrency industry.

Tornado Cash has suffered a backend attack with a vulnerability that can steal deposit data and funds, putting user deposits at risk, as reported by CoinDesk. As per a Medium post by community member Gas404, malicious javascript code was hidden in a governance proposal submitted by a so-called Tornado Cash developer two months prior to January 1st. The code redirected deposit data to a public server hosted by the same developer, resulting in one deposit being stolen.

According to data from crowdfunding platform Juicebox, Ethereum co-founder Vitalik donated 12.6 ETH to the legal defense fund Free Alexey & Roman, which aims to help Tornado Cash co-founder Roman Storm and developer Alexey Pertsev avoid legal punishment, 2 days ago. In addition, Jesse Powell, co-founder of the cryptocurrency trading platform Kraken, also donated 12.6 ETH yesterday. At the time of writing, the fund has received a total of 470 donations, with a total amount of 215.9 ETH, equivalent to approximately $480,000. The fundraising campaign will last for one month (31 days).

Edward Snowden, the whistleblower-turned-international fugitive, has endorsed the legal defense fund for Roman Storm, co-founder of the now-sanctioned cryptocurrency mixing service Tornado Cash. Storm is currently facing money laundering charges for his part in creating Tornado Cash, which was popular for allowing users to send and receive Ethereum anonymously. Snowden has asked his followers to help Storm, stating that privacy is not a crime. The fundraiser's website, called "We Want Justice DAO," has received 177 ETH, worth roughly $400,000 at current prices, and has received donations from Ethereum co-founder Vitalik Buterin and Bankless founder Ryan Adams.

The US presidential candidate discussed cryptocurrency-related issues in an interview. Republican presidential candidate Vivek Ramaswamy stated that in August of this year, a judge agreed with the Treasury Department's view after the department sanctioned Tornado Cash last year. Critics of the crypto industry argue that Tornado Cash is not a person but a software, and the Treasury Department has no right to sanction Tornado Cash. Ramaswamy stated that punishing the entire protocol or operation, as in the Tornado Cash case, is illegal and unconstitutional under current law, which is different from holding individual wrongdoers accountable.