Paradigm Advocates for Jury Clarity in Tornado Cash Case
Venture capital firm Paradigm has filed an amicus brief in the legal case against Tornado Cash co-founder Roman Storm. The brief emphasizes the need for clear jury instructions regarding money transmission laws, which could significantly impact the crypto industry.
Understanding the Legal Argument
Paradigm’s legal team, including Chief Legal Officer Katie Biber and General Counsel Gina Moon, contends that prosecutors must prove Storm knowingly operated a money-transmitting business. Key elements include demonstrating fee collection, public fund transmission, handling of alleged criminal proceeds, and fund control. As a non-custodial protocol, Tornado Cash never holds user funds, challenging the prosecution’s core argument.
Potential Consequences for Tech Innovation
A conviction could establish a dangerous precedent for software developers. The ruling might extend liability to creators for how others use their tools, potentially chilling innovation across crypto, fintech, and broader technology sectors including open-source and AI development.
Regulatory Context and Precedents
The brief cites 2014 US Treasury Department guidance under President Obama, which distinguished software development from money transmission. This historical context, combined with the DOJ’s recent policy against prosecuting crypto mixers for user activity, forms a crucial backdrop for the case.
What Comes Next
With the trial set for July 14, the crypto community watches closely. This case represents a pivotal moment in balancing technological progress with appropriate regulatory oversight, with implications that may shape the future of decentralized finance.
