Roman Storm, co-founder of the non-guardian cryptographic mixer Tornado Cash, was found guilty of conspiracy in order to operate a license-free money transmission company in New York yesterday.
Decentralized finance defenders (DEFI) fear that the guilty verdict of this accusation could not establish a precedent for developers of other DEFI protocols, regardless of the facts that the funds are not under the control of the teams.
A jury “in the deadlock” could not make unanimous decisions on two other accusations confronted with the storm, linked to the violation of sanctions and money laundering.
The accusation of transmission of money leads to a maximum sentence of five years, far below 20 years for the other two charges.
However, votes from all over the DEFI sector claim that the accusation on which Storm was found guilty, also known as the “1960 accusation”, could have ramifications going far beyond the Tornado Caisse.
Crypto lawyer Jake Cervinsky, who works with organizational organizations defense of education funds and the Blockchain Association, said that yesterday’s result was “A sad day for Defi. “”
He underlines the distinction between the platforms of childcare, such as centralized exchanges, and the protocols DEFI such as the Tornado Cash, arguing that “section 1960 should not apply to the developer of a non-guardian protocol which lacks control of user funds”.
Michelle Korver of A16Z also warned that “the decision could have a broad and involuntary impact on the blockchain ecosystem as a whole” and “endangers the push of the current administration) to place the United States at the forefront of cryptographic innovation”.
Roman Storm promises to “fight all along”
Storm himself seemed to be relieved by the result, telling journalist Eleanor Terret, outside the courtroom: “It’s a big victory. The charge of 1960 is bullshit and we will fight it all the way. ”
Many believe that Storm has a good luck on appeal, especially since the own fincen advice in 2019 clearly indicates “A supplier of anonymization software is not a money transmitter. “”
The guidelines draw up that “people providing” delivery, communication or network access services used by a money issuer to support monetary transmission services “are” exempt from the definition of the silver issuer “.
This definition was strongly debated before the trial, judge Katherine Polk Failla finally judged that the control of money is not a prerequisite for the exploitation of a money issuer.
Read more: the judge rules The crypto protocols can be monetary issuers without control
Korver underlines that yesterday’s guilt verdict on the 1960 accusation “was motivated by legal interpretation before the court trial, not the search for facts on the jury”.
The case of Roman Storm was however not the only one affected by Failla’s decision last year.
Last week, the trial of the developers of Wallet Samurai, Keonne Rodriquez and William Longan Hill, concluded a guilt of guilt on the same accusation of money transmission, part of an agreement in which the prosecutors abandoned an additional accusation of money laundering.
The previous one established by the result of Samurai can give an additional weight to the decision against Storm, and make a more delicate appeal.
Via a complaint filed in January, the Defi developer and colleague from the Coin Center Michal Lewellen is currently continuing the Ministry of Justice for a declaratory judgment on the classification of non -guardian protocols as money issuers, comparing these tools to “an envelope used to move checks by post”.
Peter Van Valkenburgh, Executive Director of Coin Center, promised that the organization will support the call of Storm and “will do everything to ensure that the judge gets the law the next time.”
Even Judge Failla hinted that there was much trouble to fight.
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