- A U.S. judge allowed an IRS agent to testify about the movement of stolen crypto in the trial of Roman Storm, co-founder of Tornado Cash.
- The IRS agent could not prove a scammer directly deposited a victim’s crypto into Tornado Cash, but said some of the funds eventually entered the protocol.
- Blockchain security researchers disputed the agent’s claim, saying no evidence showed the stolen funds reached Tornado Cash.
- Prosecutors argued Storm and his partners had the power to control features that might have prevented money laundering, according to trial testimony.
- Roman Storm is charged with conspiracy to commit money laundering, operating an unlicensed money-transmitting business, and violating U.S. sanctions, facing over 40 years in prison.
Roman Storm, co-founder of Tornado Cash, faced a setback in court on Wednesday as a federal judge permitted an IRS special agent to testify regarding the movement of stolen crypto in his ongoing criminal trial. The testimony concerns $250,000 worth of digital assets allegedly stolen from Hanfeng Lin, a Georgia resident, in a 2021 online scam.
During cross-examination, IRS Special Agent Stephan George said he could not verify the stolen funds were deposited directly into Tornado Cash by Lin’s scammer. He acknowledged that the crypto could have changed hands through multiple digital wallets. However, he stated that part of the stolen money did end up in Tornado Cash, a claim that clashes with analyses by blockchain experts.
Taylor Monahan, a crypto security researcher, announced on social media that she found no evidence the stolen funds reached Tornado Cash, a view that crypto investigator ZachXBT endorsed. Defense attorneys argued George was not qualified to perform blockchain tracing, citing flaws in his methods. The judge allowed George’s testimony, letting defense lawyers challenge his qualifications and approach in cross-examination.
Testimony also covered Tornado Cash’s design. According to Philip Werlau of blockchain analytics firm AnChain.AI, Storm and his co-founders controlled enough voting tokens to change features within the mixer’s system that could have blocked some money laundering. Werlau said the founders did introduce some restrictions but highlighted that these were easy to bypass through command-line access rather than the website interface.
The trial is set to continue, with prosecutors finishing their presentation soon and the defense expected to call further witnesses. Whether Storm will testify remains undecided. If convicted, he faces a sentence exceeding four decades for money laundering conspiracy, unlicensed financial activity, and breaching U.S. sanctions requirements.
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