<\/p>\n
The US government expects to rest its case against Tornado Cash co-founder Roman Storm on Thursday following yesterday\u2019s anticipated testimony from an expert witness.<\/p>\n
The defense is set to counter the prosecution\u2019s efforts to show Storm could have better guarded against \u201cbad actors\u201d using Tornado Cash \u2014 the crypto mixer used for transaction privacy around which this case centers.<\/p>\n
IRS Criminal Investigation special agent Stephan George took the stand to share findings that appeared to link a portion of the funds stolen from Hanfeng Lin to Tornado Cash.\u00a0<\/p>\n
Lin testified last week that a fraud recovery service told her to contact Tornado Cash about retrieving her funds. The defense was reportedly<\/a> considering a mistrial motion after a subsequent witness, FBI Special Agent Joel DeCapua, didn\u2019t link Lin\u2019s funds to Tornado Cash \u2014 putting the relevance of Lin\u2019s testimony in question.<\/p>\n But George said Wednesday he used public blockchain data \u2014 along with Chainalysis Reactor and TRM Labs \u2014 to find that a portion of Lin\u2019s stolen funds that left Crypto.com ultimately went to Tornado Cash in November of 2021.\u00a0<\/p>\n He used an accounting method known as Last In, First Out (LIFO) \u2014 which assumes the disposal of crypto acquired most recently. When defense attorney Keri Axel challenged LIFO during cross-examination, George defended the method as a generally accepted accounting principle that the IRS \u201crespects.\u201d<\/p>\n Axel\u2019s cross-examination of George was set to continue Thursday morning.\u00a0\u00a0<\/p>\n While the possibility of a mistrial was briefly mentioned in court Tuesday, the defense did not immediately comment about whether that\u2019s still being considered.\u00a0<\/p>\n \u201cIt\u2019s usually not the situation that a trial is declared a mistrial merely because a witness\u2019s testimony is not entirely germane,\u201d Patrick Gruhn, a former partner at Crypto Lawyers LLC and FTX\u2019s ex-head of Europe, told Blockworks. \u201cCourts generally expect a lot more \u2014 egregious misconduct or prejudicial facts against the jury \u2014 before they suspend a trial.\u201d<\/p>\n Though George linking Lin\u2019s funds to Tornado Cash was an attempt by prosecutors to clear up a point of contention that arose, the charges against Storm go well beyond that.\u00a0<\/p>\n At the heart of this case is whether Storm essentially helped criminals \u2014 such as North Korean state-sponsored hackers, The Lazarus Group \u2014 hide stolen funds, as the government alleges. He is charged with conspiracy to commit money laundering, conspiracy to commit sanctions violations, and conspiracy to operate an unlicensed money transmitting business.<\/p>\n Key questions of the case, as shared in opening statements last week, include whether Tornado Cash was immutable and if the developer is responsible for how software is used.<\/p>\n Defense attorney Keri Axel said in her opening statement: \u201cIt\u2019s not a crime to make a useful thing that is misused.\u201d<\/p>\n Read more: <\/strong>\u2018He lied\u2019: US government makes opening plea to jury in Roman Storm trial<\/a><\/p>\n After the jury left the courtroom on Wednesday afternoon, the prosecution told Judge Katherine Polk Failla that it had two witnesses remaining and could wrap up by Thursday morning.\u00a0<\/p>\n Though the defense had not finalized its slate of witnesses before the court let out on Wednesday, Storm\u2019s attorneys said they could rest their case as soon as Monday. Storm has not yet decided whether he will take the stand, they added.<\/p>\n \u201cI assume you don\u2019t have a hacker testifying,\u201d Failla quipped. \u201cThat would be interesting.\u201d\u00a0<\/p>\n The prosecution did<\/em> put a hacker on the stand on Tuesday. That was Shakeeb Ahmed, who is currently serving a three-year sentence after pleading<\/a> guilty to computer fraud last year.<\/p>\n Ahmed, a former technical lead in Amazon\u2019s bug-bounty program, detailed how he stole $12 million worth of crypto from exchanges Crema and Nirvana in 2022.<\/p>\n He put his own funds into a Tornado Cash pool to \u201canonymize\u201d them before using a third party \u2014 known as a relayer \u2014 to withdraw them. He then went on to hack the Crema exchange. He did not use Tornado Cash at any point leading up to, or after, he hacked the Nirvana exchange.<\/p>\n The defense, during cross-examination, made clear to the jury that Ahmed never put stolen funds into Tornado Cash.\u00a0<\/p>\n \u201cYou didn\u2019t use Tornado Cash for the [hack] proceeds?\u201d defense attorney David Patton asked.\u00a0<\/p>\n \u201cCorrect,\u201d Ahmed said.<\/p>\n Patton also asked whether Ahmed ever communicated with Storm and the other Tornado Cash founders, or conspired with them to commit crimes.<\/p>\n \u201cI did not,\u201d Ahmed noted.<\/p>\n The prosecution sought to establish, through another witness, that Storm \u2014 along with Tornado Cash co-founders Roman Semenov and Alexey Pertsev \u2014 could have made changes to the protocol to guard against bad actors using it.\u00a0<\/p>\nHacker takes the stand<\/h2>\n
Questioning Tornado Cash\u2019s design choice<\/h2>\n