Prominent crypto venture capital firm Paradigm has filed an amicus curiae brief in defense of Roman Storm, the co-founder of Tornado Cash, as he prepares for trial on July 14 in New York. The case has become a critical turning point for crypto developers, with potential consequences for the future of decentralized finance (DeFi) and blockchain privacy tools in the United States.
Crypto Developer Lawsuit Raises Concerns Over FinCEN Guidance and Open-Source Software
In its legal brief, Paradigm argues that the U.S. government is wrongfully labeling Storm’s open-source DeFi protocol as an illegal money-transmitting service. According to the firm, this position goes against clear FinCEN guidance, decades of case law, and the plain text of financial regulation.
“The irrationality and unfairness of these charges cannot be overstated,” Paradigm said. “The Treasury Department has long recognized that publishing code does not make someone a money transmitter.”
The amicus brief stresses that to convict Storm, the jury must find beyond a reasonable doubt that he knowingly operated a money-transmitting business, knowingly transmitted funds, and was aware those funds were tied to criminal activity — requirements the prosecution has yet to satisfy.
Ethereum Foundation Donates $500K as Roman Storm Declares: ‘If I Lose, DeFi Dies With Me
Roman Storm, who was charged in 2023 with conspiracy to commit money laundering and violating the International Emergency Economic Powers Act (IEEPA), is currently raising $2 million to fund his legal defense. On Friday, the Ethereum Foundation donated $500,000 to support Storm.
Storm insists Tornado Cash is simply a non-custodial, immutable, and permission less software tool designed for user privacy — not a criminal enterprise.
“I poured my soul into Tornado Cash,” Storm said in a passionate post on X. “If I lose, DeFi dies with me. The dream of financial freedom — the code I believed in — it all fades into darkness.”
While prosecutors recently dropped one charge tied to operating an unlicensed money-transmitting business, they are pressing forward with the core money laundering charges and the IEEPA conspiracy count.
The U.S. treasury’s office of foreign assets control (OFAC) sanctioned tornado cash in 2022, a decision that was the subject of much controversy & reserved in March of 2025, but the legal implications for storm & other developers remain.
The ruling has suddenly turned the case into a landmark moment for crypto rules, especially for those who are trying to build truly decentralized services. Some legal scholars & supporters of the blockchain industry warn that a conviction in DeFi is likely to have a chilling effect on innovation in the space, development of open-source code & the rights to financial privacy in the U.S.
Disclaimer:
This article is for informational purposes only and does not constitute financial advice. Always do your own research before making any investment decisions.
