TLDR:
- Roman Storm’s attorneys claim prosecutors withheld FinCEN communications showing non-custodial crypto mixers aren’t legally “money transmitting businesses”
- The defense cited the same FinCEN documents used in the Samourai Wallet developers’ case
- FinCEN reportedly stated that non-custodial services like Samourai Wallet likely don’t qualify as money services businesses
- Prosecutors have dropped one of two charges related to money transmitting business rules
- Storm’s trial is scheduled for July 14, 2025, despite recent court ruling against OFAC sanctions on Tornado Cash
Key Legal Dispute Emerges
Roman Storm’s defense team has filed a motion accusing federal prosecutors of hiding crucial evidence in the ongoing Tornado Cash case.
The attorneys claim that prosecutors withheld communications with the Financial Crimes Enforcement Network (FinCEN) that could undermine the government’s case.
The disputed communications reportedly show that non-custodial cryptocurrency mixers do not fall under the legal definition of a “money transmitting business.” This classification is central to the charges against Storm.
According to court documents filed on May 16, Storm’s attorneys allege that prosecutors have known since at least 2023 that services like Tornado Cash may not qualify as money transmitters under the law. The defense team wrote that the government “played fast and loose and, at worst, misled this Court” regarding FinCEN guidance.
The motion cites the same legal documents used by the Samourai Wallet developers in their case. Both Tornado Cash and Samourai Wallet are non-custodial mixing protocols where users maintain control of their assets.
FinCEN Communications at Center of Dispute
The legal filing points to an August 2023 call between prosecutors in the Southern District of New York and senior FinCEN officials. 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 distinction is vital as money services businesses face strict regulatory requirements under US law. The defense argues this same logic should apply to Tornado Cash.
US prosecutors have denied withholding evidence. They claim they submitted the FinCEN communications within the required timeframe during legal discovery.
Storm’s defense disagrees with this characterization. They argue the government misled the court about relevant FinCEN guidance, which led to the denial of a motion to dismiss and rejection of a request for FinCEN-related discovery.
Case Continues Despite Related Ruling
The legal challenge comes after Federal Judge Robert Pitman issued a ruling on April 28 denying the Office of Foreign Assets Control (OFAC) the ability to reimpose sanctions on Tornado Cash. This decision set a legal precedent for non-custodial mixer cases.
Despite this ruling, federal prosecutors are moving forward with their case against Storm, though they have modified the charges. They recently dropped one of two charges tied to money transmitting business rules, following new Department of Justice guidance discouraging enforcement against crypto mixers.
Storm’s defense team argues the FinCEN communications remain relevant to the remaining counts, including conspiracy to launder money and violate sanctions. They are now asking the court to compel the government to disclose all communications with FinCEN and provide related materials from the Samourai Wallet case.
The trial is currently scheduled for July 14, 2025. Storm’s legal team continues to pursue all available options to challenge the prosecution’s case.
