- Storm’s lawyers say prosecutors hid key FinCEN communications.
- FinCEN said Samourai Wallet likely wasn't a money transmitter.
- The defence argues this weakens the case against Tornado Cash.
Roman Storm’s legal team is accusing federal prosecutors of misleading the court about how US law treats noncustodial crypto mixers.
His lawyers cited newly surfaced details from a related case against Samourai Wallet developers.
In a motion filed on Friday, Storm’s lawyers argue that prosecutors withheld key communications with the Financial Crimes Enforcement Network that could undermine the government’s central claim that Tornado Cash operated as an unlicensed money transmitting business under US law.
The filing points to an August 2023 call between prosecutors in the Southern District of New York and senior FinCEN officials, revealed earlier this month in the Samourai Wallet case.
During that call, FinCEN reportedly stated that because Samourai Wallet never took custody of user funds, it likely did not qualify as a money services business, a designation that carries hefty regulatory requirements.
Tornado Cash, like Samourai Wallet, is a noncustodial crypto mixing protocol.
Users maintain control of their assets at all times, which the defence argues is a key factor in whether such services meet the legal definition of a money services business.
Storm’s attorneys say the withheld FinCEN communication supports their argument that Tornado Cash is not a money transmitting business under federal law.
“The government, at a minimum, misled this Court under relevant FinCEN guidance,” the filing states, adding that prosecutors’ earlier arguments caused the court to deny a motion to dismiss and reject a request for FinCEN-related discovery.
Prosecutors recently dropped one of two charges tied to money transmitting business rules, following new DOJ guidance discouraging enforcement against crypto mixers.
But Storm’s defence argues the FinCEN call is still relevant to remaining counts, including conspiracy to launder money and violate sanctions.
Storm’s team is now asking the court to compel the government to disclose all communications with FinCEN and turn over related materials from the Samourai Wallet case.
His trial is scheduled for July 14.
Kyle Baird is DL News’ Weekend Editor. Got a tip? Email at kbaird@dlnews.com.
