SDNY Misrepresented CoinDesk Reporter As Tornado Cash Developer In $600M Cash Out Message

• The Government has wrongfully attributed a Telegram message regarding a $600M Axie Infinity cash out sent by a CoinDesk reporter as authored by Tornado Cash developer Alexey Pertsev in the indictment, the defense claims.
• The message in question was extracted from evidence collected by Dutch authorities and originally provided to Storm's defense in faulty format, for which the Government has apologized.
• The defense is now requesting an inspection of grand jury minutes as it claims that the Government may have misled the court – a request which should be denied because the message as represented in the indictment "does in fact 'say' what it says," says the Government.

The parties in the criminal case against Tornado Cash developer Roman Storm are still debating whether Telegram chat messages obtained by the Government from Dutch authorities should be admissible at trial.

The messages were extracted from the cell phone of Tornado Cash developer Alexey Pertsev, who is currently preparing his appeal in the Netherlands.

The defense has argued that the extractions should be dismissed from evidence as forwarded messages cannot be attributed to original authors, causing identification issues.

In a letter filed yesterday, the Government argues that the attribution issues are not reflected in the extracted contents it intends to offer as evidence at trial, but were caused by a formatting error when sharing the extracted contents in earlier discovery, for which it apologizes.

The prosecution notes that the defense was provided with the correctly formatted data in December 2024 which it claims does not contain such errors, after claiming in a Friday night filing that the lack of attributions to original authors were due to a Telegram privacy feature.

The defense disagrees in another filing issued yesterday, stating that the formatted messages continue to be unattributable to original authors. “It appears the Telegram messages that were extracted are not accurate. The fact that they are plainly missing critical information undermines their reliability,” the defense argues.

The reliability of the messages were first questioned by the defense in part on the basis that IRS-CI Special Agent Peter Dickerman, who is meant to testify to the authenticity of the records, did not perform the original extraction himself, but rather extracted content from the Dutch extracted content.

Judge Failla had warned the Government to "be comprehensive in responding to these arguments because these are real arguments that the defense is making that I am considering" in a hearing on Friday afternoon.

"Anyone Around to Chat About Axie?"

"The government’s self-selected extraction does not show the author of forwarded Telegram messages," the defense states in their Friday letter, which "results in the misleading appearance that the person who forwarded the message authored it."

"The misleading nature of the extracted Telegram chat messages is demonstrated by the fact that the government itself has wrongfully attributed the origin of the purported message," the defense states.

The Government alleges in its indictment that "[Pertsev] sent a message to STORM and SEMENOV through the Encrypted App, saying 'Heya, anyone around to chat about axie? Would like to ask a few general questions about how one goes about cashing out 600 mil.'"

The Government denies that it misrepresented the message because it characterizes the content "as saying what it says", but does concede that "perhaps the indictment could have been clearer about the origin of the language."

It additionally claims that "the statement was plainly adopted by Pertsev," while at the same time acknowledging that "Pertsev announced 'we’re being contacted by CoinDesk'" along with the forwarded contents.

Prosecutors again failed to represent the message as a forwarded message not authored by Pertsev in a Tuesday hearing, stating that "one of the co-conspirators asked, sum and substance, I'd like to ask you some questions about how you go about laundering $600 million worth of stolen crypto."

The defense is now urging the court to allow an inspection of grand jury discussions, as it has “grave concerns about the integrity of the grand jury proceedings since it appears that the government provided false information to the grand jury.”

An inspection of grand jury records should be denied, says the Government, because "regardless of who actually typed out that message, its relevance remains the same: it demonstrates the defendant’s knowledge of the Ronin Hack and the likelihood that Tornado Cash would be used in connection with it."

Schroedinger's Message Forwarding

The Government has argued that "the fact that Pertsev forwarded a question from a journalist rather than posing the question himself was something that the defense could have discovered and moved on nearly two years ago, when the Dutch-produced extracted contents of Pertsev’s phone were produced."

On July 9th, the defense asked the Government to confirm "whether the Government’s native version of [the message] and the other Telegram chats obtained allegedly from an image of Pertsev’s phone reflect the source of forwarded messages."

The prosecution responded on July 10th that "we can confirm that these are the chats as they were collected from the original phone extraction by Special Agent Dickerman, and that the exhibits accurately reflect Special Agent Dickerman’s extraction," which the defense characterizes as "a master class of Orwellian non-responsiveness."

The Government has since been going back and forth with its explanations for the apparent lack of attributions in forwarded messages.

On Friday, the Government argued that the defense's depiction "is replete with baseless assumptions," stating that "nothing is 'missing' from the records that Special Agent Dickerman obtained."

The defense has not established "that Telegram generally reflects the original author of forwarded messages–let alone that it did so on Pertsev’s cellphone in 2022," the Government argues, referring the court to Telegram privacy features that allow the forwarder of messages to manually hide original authors.

The Government then corrected its statements in its Saturday filing: "In response to questions raised by defense counsel today, the Government re-reviewed the September 2023 production in the Government’s Relativity database and discovered that the versions of these chats produced at that time were rendered as text files, and thus are not in the same format as the versions extracted by Special Agent Dickerman," the Government writes.

"Those text files contain the same issue as the HTML files that the Government initially received from the Dutch, in that they do not identify when a message was forwarded," the prosecution states. "The Government sincerely apologizes for this error."

The Government states that it "produced the versions of the chats it intends to offer at trial—those extracted directly by Special Agent Dickerman and which clearly indicate forwarded messages" to the defense in December 2024.

"That the Government had previously produced a different format of the messages that did not indicate forwarding simply has no bearing on the authenticity of the chats or their reliability," prosecutors argue.

The question why Dickerman's extractions do not attribute forwarded messages to original authors appears to remain.

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