The cryptocurrency community has reacted significantly to the District Judge Katherine Polk Failla’s ruling against Tornado Cash and its co-founder Roman Storm. The dismissal of the effort to eliminate charges following the decision has raised alarms about the future of open-source development and the status of code as a kind of free speech.
In her late September decision, Judge Failla asserted that the possibly uses of code do not come under First Amendment protections. In answer to the positions taken by Storm and Tornado Cash’s defenders, who argued that their crypto mixer should not be held to the same standards as money-transmitting businesses, this response came. Notwithstanding this, the Southern District of New York dismissed these claims and let the case go forward to trial.
The larger crypto community felt outrage after the ruling and feared it might establish a restriction on developer freedom. Variant’s Chief Legal Officer, Jake Chervinsky, cautioned that the ramifications of the decision could stretch outside the cryptocurrency world, possibly influencing sectors focused on code including artificial intelligence.
This is an unstable condition, and our downward spiral is accelerating. Chervinsky said in response, “Pay attention.”
Crypto Community Raises Legal Concerns Amid Tornado Cash Ruling
On social media, disagreement is arising, as many users voice their area of concern about how open-source code will be interpreted legally and the possibility of censorship on the horizon. Even with these anxieties, Judge Failla pointed out during a telephone hearing that the U.S. government’s measures against sanction evasion and money laundering have no link to debates over free speech.
The August 2023 indictment against Tornado Cash and Storm accuses the crypto mixer of being intentionally designed for illegal purposes. Federal prosecutors say that the platform enabled more than $1 billion in unlawful transactions, included laundering money for the infamous North Korean hacking group, Lazarus.
Tornado Cash functions on the Ethereum blockchain and helps users to anonymize their transaction history. Storm and his backers contend that developers deserve no blame for the possible misuse of coding, but Judge Failla’s judgment reflects the court’s belief in the opposite.
The trial is slated to kick off on December 2 and should take about two weeks to complete. This follows a like case in the Netherlands, where judge found Tornado Cash founder Alexey Pertsev guilty for his contribution to the crypto mixer. Since the appeal, the crypto community has kept supporting the slogan “code is not a crime.”
In light of the active Tornado Cash investigation, authorities warn that the decisions taken may result in important consequences for unfettered development of open-source technology and the liberty to speak online.
