DEF Lawyer Faults Inaccurate DOJ's Tornado Cash Arguments Against Motion to Dismiss Case

DEF Lawyer Faults Inaccurate DOJ’s Tornado Cash Arguments Against Motion to Dismiss Case

The legal chief at DeFi Education Fund (DEF) faults the arguments the Department of Justice (DOJ) advanced to challenge a motion to dismiss the case against Tornado Cash. Lawyer Amanda Tuminelli indicated that the arguments advanced by prosecutors to oppose a motion by Roman Storm seeking dismissal of the case suffered technical inaccuracies. 

Technical Inaccuracies Spotted in DOJ’s Arguments

Tuminelli indicated that the arguments by the DOJ to sustain the charges leveled against the crypto mixer Tornado Cash and its developer Roman Storm appear to be a dislike for privacy. DEF lawyer decried the presence of a few egregious statements. 

Tuminelli reflected on the arguments by the DOJ on Friday, April 26, to dispute grounds for Storm, who was seeking to dismiss charges alleging conspiracy and money laundering. The lawyer revealed via Saturday, April 27, posts on X that the DOJ arguments were inaccurate, contempt for privacy, and misapplying the law. 

Tuminelli illustrated the technical inaccuracies, where the prosecutors indicated that Storm had submitted that misconduct executed using computer software had absolute protection. Also, the DOJ stated that Storm claimed crypto is inherently beyond law enforcement’s reach. 

DOJ Overlooked DEF Amicus Brief 

Tuminelli faulted the DOJ submission as it did not align with the Storm argument. The DEF lawyer admitted the challenge of imagining that the arguments were not intentionally misleading. 

Tuminelli decried the demonstrated inadequacy of the prosecutors in understanding how the immutable smart protocols function. The lawyer faulted the claim that Storm, like co-founder Roman Semenov, played a role in executing alleged unlawful activity on the crypto mixer – Tornado Cash. 

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The DOJ appears to overlook the arguments that DEF cited in its amicus brief filed to support the dismissal of Storm’s charges. 

The advocacy group submitted that the International Emergency Economic Powers Act (IEEPA) grants the president power to regulate extraordinary threats. Such has never been in use and should not be deployed to penalize software developers. 

Tuminelli observed that DEF had indicated that the developer hardly established a direct engagement with Tornado Cash. Also, the developers did not portray solicited conduct with the sanctioned entity. 

Huge Implications for Tornado Case for Crypto and Internet Freedom

The Tornado Cash case attracts the attention of observers who consider the DOJ’s arguments likely to impact crypto and internet freedom. The DOJ submitted that money transmitting is under US law provisions and is hardly considered necessary to exercise control over the funds transferred. Instead, it extends to funds transfer irrespective of the means utilized. 

A pseudo-anonymous commentator identified as L0la L33tz illustrated in a Saturday, April 27 post that the broader argument by the DOJ likely will set a dangerous precedent that would erode internet freedom.

The commentator argued that the DOJ’s arguments indicate that any party that broadcasts financial transactions, among them internet service providers, could become subject to the KYC. The impact would extend to the postman even if one sends $50 in the mail as it meets the money service business definition advanced by the DOJ. 

Tornado Cash Suit Likely a Seminal Crypto Case

Financial journalist John Koning warned that the DOJ arguments would likely turn it into a seminal crypto court case. It will impact which parties bear liability for the smart contracts and interfaces accessing such and to what extent. 

Crypto lawyer Gabriel Shapiro said he is not surprised that DOJ arguments portray decentralized applications as money transmitters. He considers that the case could implicate the relayers and native tokens of crypto mixer TORN. 

Shapiro observed that relayers were involved in Ethereum payments, such as paying gas fees. Similarly, TORN offered economic interest in the relaying service provider. 

Compared to most decentralized applications (dApps), they allow user transactions on Ethereum. Transactions would involve payment of gas fees themselves or node-owned wallet operators and not the DeFi web application operator. 

Shapiro illustrated that the relayers were executing gas payments on users’ behalf. The crypto lawyer questions why it would not constitute money transmission as defined under the law. Although urges calmness indicates that it is closer to matching the provisions for the money transmission.

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