Tornado Cash – A significant legal struggle for DeFi. Tornado Cash Protocol was placed on a restricted list by the Office of Foreign Asset Control (OFAC) of the United States in August of 2022. Since that time, everything regarding the protocol has gotten steadily worse. In a further step, the courts will arrest the company’s developers and founders.
Since the OFAC trial, Tornado Cash has been having problems.
Since the 8th of August 2022, OFAC has been focusing its attention on the Tornado Cash methodology. In point of fact, the latter contends that the protocol is to blame for enabling the laundering of a number of billions of dollars.
The protocol known as Tornado Cash is being accused of money laundering.
At the same time, fines have been imposed on American entities that make use of the protocol. The occurrence was so significant that it even had an effect on the creation of blocks on Ethereum. In point of fact, the vast majority of Ethereum blocks reported blocking of Tornado Cash transactions not long after the announcement of the sanctions.
At long last, on the last day of August 2023, Roman Semenov and Roman Storm, the two men credited with founding Tornado Cash, were taken into custody by the authorities in the United States. A significant test, the results of which will have a wide range of repercussions for DeFi and open-source software in general.
In point of fact, if the co-founders were found guilty after the trial, it would establish a new standard for how the law is applied in the United States. Any developer working on open-source software runs the risk of being singled out for the unauthorized use of their technology.
Roman Storm vehemently refutes all allegations.
The proceeding against Roman Storm kicked off on September 6th, a Wednesday, in the New York District Court. According to the information provided by our colleagues at Inner City Press, he is accused of violating sanctions imposed against North Korea in connection with Tornado Cash.
During the course of the hearing, the judge referred to Tornado Cash as “an infamous cryptocurrency mixer that laundered over one billion dollars in criminal proceeds and violated US sanctions.”
Co-founder Roman Storm, on the other hand, has entered a plea of not guilty. In point of fact, it is simply involved in the creation of the program; nevertheless, it does not believe itself to be accountable for the ways in which it is put to use. The meeting was finally called to a close after the first day of hearings was completed. In the coming weeks and months, the legal process regarding this issue will run its course.
Let’s keep our fingers crossed for Roman Storm and hope that he can garner support from the cryptocurrency community. Shortly after the initial attacks by OFAC, the prominent cryptocurrency exchange Coinbase announced its support for the protocol.