Roman Storm, one of the developers of Tornado Cash, is seeking dismissal of charges related to alleged money laundering and sanctions violations. Storm's legal team argues that the recent US Fifth Circuit Court decision in Van Loon v. Department of the Treasury invalidates the basis of the charges. The motion, filed in the Southern District of New York, highlights the immutability of Tornado Cash's smart contracts, a key factor in the Van Loon ruling.

In Van Loon v. Department of the Treasury, the Fifth Circuit ruled that Tornado Cash’s immutable smart contracts do not constitute “property” under the International Emergency Economic Powers Act (IEEPA). The court stated, “Immutable smart contracts are unchangeable and unremovable, remaining available for anyone to use.” 

The ruling directly challenges the U.S. government’s sanctions and allegations against Storm, as it emphasizes that Tornado Cash developers lacked control over the smart contracts after their deployment.

Preliminary statements claiming the “immutable smart contracts” cannot be considered as “property”

“The immutable nature of Tornado Cash means no one, not even its creators, can control or alter its use,” the court noted. This immutability undermines the government’s claims that Storm and others conspired to enable money laundering or violate sanctions.

Storm faces three counts: conspiracy to commit money laundering, operating an unlicensed money-transmitting business, and violating IEEPA. His attorneys argue that the immutability of Tornado Cash means that Storm could not “willfully” violate sanctions, as required by IEEPA. 

They also claim that the lack of control over Tornado Cash smart contracts negates the possibility of knowingly facilitating illegal financial transactions. Additionally, Tornado Cash’s operations do not meet the statutory definition of a money-transmitting business, as it neither charged fees nor controlled funds.

The motion also references a parallel case in the Eleventh Circuit, Coin Center v. Treasury, which raises similar questions about the legal classification of Tornado Cash’s operations.

The case underscores the complexities of regulating decentralized systems like Tornado Cash. Legal experts note that rulings such as Van Loon could set significant precedents, limiting the government’s ability to target developers of immutable blockchain protocols.

Roman Storm remains free on bond while awaiting the court’s decision. The outcome of his motion could redefine the boundaries of developer liability in the cryptocurrency space.