Roman Storm, co-founder of Twister Money, described his prosecution in a Jan. 22 X publish as a “terrifying criminalization of privateness.” Twister Money is a non-custodial privateness protocol facilitating non-public crypto transactions through open-source code.
He acknowledged:
“I’m being prosecuted for writing open-source code that permits non-public crypto transactions in a totally non-custodial method […] The fees towards me threaten to criminalize software program growth itself.”
Storm is charged with working an unlicensed money-transmitting enterprise, conspiracy to commit cash laundering, and sanctions evasion. He was arrested on Aug. 23, 2023, and his trial is ready for April 14, 2025.
The impression of the case is already obvious. Storm famous that one other developer, Michael Lewellen, not too long ago filed a lawsuit towards the Division of Justice (DOJ), searching for reduction from fears of releasing new software program within the wake of Storm’s prosecution.
The Lewellen lawsuit addresses the identical reasoning the DOJ used to prosecute the builders of Twister Money and Samourai Pockets. This reasoning might have broad implications, because it might end in criminalizing software program growth.
Storm’s assertion comes after the Fifth Circuit Courtroom of Appeals ordered the US Treasury’s Workplace of Overseas Property Management (OFAC) to take away Twister Money-linked addresses from its Specifically Designated Nationals and Blocked Individuals (SDN) checklist.
Moreover, the ruling highlighted that sanctioning the protocol doesn’t block dangerous actors from utilizing it, as sensible contracts are autonomous and can’t be owned, managed, or altered.
The court docket additionally prompt updating laws to manage the usage of crypto-mixers. Consequently, the present authorized framework mustn’t prohibit functions similar to Twister Money from working autonomously.
On Nov. 26, the US Courtroom of Appeals had already decided that the Treasury exceeded its authority by sanctioning Twister Money’s immutable sensible contracts. The authorized win motivated Storm to file a movement on Dec. 20 requesting the dismissal of the felony expenses towards him.
Assist from Vitalik Buterin
In a separate social media publish, Storm thanked Ethereum co-founder Vitalik Buterin for supporting his and fellow Twister Money developer Alexey Pertsev’s circumstances.
Buterin replied that Twister Money was constructed together with his assist, and failing to assist its builders would “violate fundamental honor.”
The Ethereum co-founder added:
“In Ethereum we shield our personal, and uphold our honor.”
The problem with Part 1960
Storm additionally highlighted confusion surrounding the Part 1960 cost of working an unlicensed money-transmitting enterprise. He pointed to conflicting interpretations of the legislation by totally different authorities businesses, which have muddied the waters of compliance and regulation for builders like himself.
Amanda Tuminelli, the Chief Authorized Officer on the DeFi Training Fund, raised issues concerning the Division of Justice’s (DOJ) interpretation of Part 1960 in December 2024.
Tuminelli argued that Part 1960 had been poorly drafted and amended haphazardly, resulting in authorized ambiguities and conflicting interpretations. The paper outlined the statute’s historic evolution and highlighted its “difficult” and “peculiar” language, which courts have criticized for being troublesome to interpret.
Moreover, she asserted that protocols like Twister Money, that are non-custodial and don’t management person funds, mustn’t fall throughout the statute’s scope. Utilizing the Roman Storm case as a research, she emphasizes that self-custodial protocols can’t be categorized as “money-transmitting companies” below the statute’s plain language.
Tuminelli additional explored the interaction between Part 1960 and definitions below the Financial institution Secrecy Act (BSA), arguing that each share a basic requirement: an entity should achieve and relinquish management over funds to qualify as a cash transmitter.
Entrepreneur Vivek Ramaswamy commented that authorities mustn’t go after builders however quite chase dangerous actors who’re breaking current legal guidelines.