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 by way of open-source code.
He said:
“I’m being prosecuted for writing open-source code that permits non-public crypto transactions in a very non-custodial method […] The fees in opposition to me threaten to criminalize software program improvement 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 influence of the case is already obvious. Storm famous that one other developer, Michael Lewellen, lately filed a lawsuit in opposition to the Division of Justice (DOJ), searching for aid 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 may have broad implications, because it may lead to criminalizing software program improvement.
Storm’s assertion comes after the Fifth Circuit Court docket of Appeals ordered the US Treasury’s Workplace of Overseas Belongings Management (OFAC) to take away Twister Money-linked addresses from its Specifically Designated Nationals and Blocked Individuals (SDN) record.
Moreover, the ruling highlighted that sanctioning the protocol doesn’t block dangerous actors from utilizing it, as good contracts are autonomous and can’t be owned, managed, or altered.
The court docket additionally advised updating laws to control the usage of crypto-mixers. In consequence, the present authorized framework shouldn’t prohibit functions resembling Twister Money from working autonomously.
On Nov. 26, the US Court docket of Appeals had already decided that the Treasury exceeded its authority by sanctioning Twister Money’s immutable good contracts. The authorized win motivated Storm to file a movement on Dec. 20 requesting the dismissal of the prison costs in opposition to him.
Help 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 instances.
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 defend 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 regulation by totally different authorities companies, which have muddied the waters of compliance and regulation for builders like himself.
Amanda Tuminelli, the Chief Authorized Officer on the DeFi Schooling Fund, raised issues in regards to 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 “sophisticated” and “peculiar” language, which courts have criticized for being tough to interpret.
Moreover, she asserted that protocols like Twister Money, that are non-custodial and don’t management consumer funds, shouldn’t fall inside the statute’s scope. Utilizing the Roman Storm case as a examine, she emphasizes that self-custodial protocols can’t be categorised as “money-transmitting companies” beneath the statute’s plain language.
Tuminelli additional explored the interaction between Part 1960 and definitions beneath the Financial institution Secrecy Act (BSA), arguing that each share a basic requirement: an entity should acquire and relinquish management over funds to qualify as a cash transmitter.
Entrepreneur Vivek Ramaswamy commented that authorities shouldn’t go after builders however quite chase dangerous actors who’re breaking current legal guidelines.
