TLDR
- Tornado Cash trial highlights clash over privacy vs. crypto crime use
- FBI: Tornado Cash saw 55% illicit use after major crypto hacks
- Defense says only 10% of Tornado Cash activity was criminal
- Court debates if Roman Storm could’ve blocked criminal crypto use
- Prosecution nears end as defense eyes mistrial in Tornado Cash case
The sixth day of Roman Storm’s trial focused on Tornado Cash’s alleged use by criminals to launder stolen crypto assets. FBI Special Agent Joel DeCapua testified for the prosecution, highlighting that criminal activity dominated platform use during specific windows. He noted that 55% of Tornado Cash traffic stemmed from illicit sources during select high-profile hack periods.
The prosecution detailed 16 major hacks, including the Ronin Bridge incident, where laundered funds exceeded $1 billion through the platform. Between April and May 2022, over half of Tornado Cash deposits came from the Ronin exploit. Officials described the mixing service as a key tool for cybercriminals, who used it to obscure blockchain trails.
DeCapua emphasized that these laundering events left victims and authorities powerless, with no mechanism to retrieve stolen assets. He described these surges as “banner days” for Tornado Cash operations. However, he acknowledged during cross-examination that Tornado Cash is only one tool in a wider landscape of privacy technologies.
Defense Counters With Data and Privacy Comparisons
The defense argued that only 10% of Tornado Cash transactions were conclusively tied to criminal activity during the two-year investigation. They questioned the reliability of the government’s analysis, noting the FBI used third-party firms like Chainalysis, which have faced scrutiny. They also introduced Telegram evidence showing Tornado Cash refused to assist BitMart after a hack, citing its decentralized structure.
They challenged DeCapua’s visual data, stating spikes in illicit use occurred only after major exploits. Outside of these spikes, usage mainly involved lawful transactions. They compared Tornado Cash to tools like VPNs or encrypted messaging, highlighting that both legal and illegal actors seek online privacy.
DeCapua admitted that average users could adopt privacy tools but downplayed the notion, saying regular users rarely employ VPNs daily. The defense used this to show that the prosecution overstated the protocol’s criminal focus. They also questioned the tracing of stolen funds tied to a key witness, suggesting errors in government evidence.
Court Weighs Privacy Design vs. Criminal Misuse
The court also considered whether Storm could have prevented Tornado Cash’s misuse with alternate coding features. Judge Katherine Failla ruled that expert testimony was admissible, allowing discussion of potential design changes like a user registry contract. Prosecutors argue Storm had the knowledge to implement such features but chose not to do so.
An expert is set to explain how Tornado Cash could have incorporated tools to block criminals. The judge said feasibility was enough, even if such tools lacked industry precedent. The testimony aims to support charges that Storm conspired to enable unlawful activity.
The court is also set to hear from an IRS agent who may confirm whether the stolen funds flowed through the protocol. Meanwhile, Storm’s defense may file a mistrial motion based on newly disclosed evidence. The prosecution plans to rest its case by Friday, after which Storm’s legal team will present their defense.
