What does Roman Storm’s guilty verdict mean for the wider DeFi sector?
The post What does Roman Storm’s guilty verdict mean for the wider DeFi sector? appeared on BitcoinEthereumNews.com.
Roman Storm, co-founder of non-custodial crypto mixer Tornado Cash, was found guilty of conspiracy to operate an unlicensed money-transmitting business, yesterday in New York. Decentralized finance (DeFi) advocates are concerned that the guilty verdict on this charge could set a precedent for developers of other DeFi protocols, regardless of the fact that funds aren’t under the teams’ control. A “deadlocked” jury was unable to come to unanimous decisions on two other charges facing Storm, related to violating sanctions and money laundering. The money-transmitting charge carries a maximum sentence of five years, much lower than the 20 years for both of the other charges. However, voices from across the DeFi sector argue that the charge on which Storm was found guilty, also known as the “1960 charge,” could have ramifications reaching far beyond the Tornado Cash case. Crypto lawyer Jake Chervinsky, who works with advocacy organizations DeFi Education Fund and Blockchain Association, said yesterday’s result was “a sad day for DeFi.” He underlines the distinction between custodial platforms, such as centralized exchanges, and DeFi protocols such as Tornado Cash, arguing “Section 1960 should not apply to the developer of a non-custodial protocol who lacks control of user funds.” Michelle Korver of a16z also warned that the “decision could have a wide-ranging and unintended impact on the blockchain ecosystem as a whole” and “jeopardizes [the current administration’s] push to place the United States at the forefront of crypto innovation.” Roman Storm vows to ‘fight it all the way’ Storm himself appeared relieved by the result, telling journalist Eleanor Terret, outside the courtroom, “It’s a big win. The 1960 charge is bullshit and we’re going to fight it all the way.” Many believe Storm stands a good chance on appeal, especially given the fact that FinCEN’s own guidance of 2019 clearly states “an…
