Judge Not Convinced That SDNY Has Venue Over Tornado Cash

On Friday, parties in the criminal case against Roman Storm held the last pretrial conference before jury selection this coming Monday. The Government presented what the defense claimed was new evidence on venue, meaning evidence which demonstrates that the Southern District of New York (SDNY) has jurisdiction over Tornado Cash.

In a tense turn of events, the defense moved for a motion to dismiss.

Talking to New Yorkers

The Government plans to introduce communications between Roman Storm and a Bloomberg reporter allegedly based in New York, with whom the developer is said to have discussed an article on the then-imposed OFAC sanctions on the Tornado Cash software.

According to the Government, Storm asked the reporter to correct a published article to demonstrate that Storm had no control over the software to stop sanctioned entities from using Tornado Cash – an undertaking in furtherance of the charged conspiracies, says the prosecution, as Storm needed the publicity to continue his criminal operations.

"There's no indication that Storm knew where the reporter was located," the defense countered. "The idea that speaking to a reporter is in furtherance of a criminal conspiracy can't be right. The reason Bloomberg corrected the article is because Bloomberg had gotten it wrong."

Whether Storm was able to stop transactions from happening in Tornado Cash will be discussed at trial, where the Government is expected to present expert testimony as to the technical steps Storm could have taken to block illicit actors from using the service.

However, because the Government is no longer pursuing the theory that Tornado Cash is a financial institution, judge Failla has disallowed the witness from testifying to the implementation of Know-Your-Customer (KYC) and Anti-Money Laundering (AML) frameworks.

The Government also plans to introduce evidence that Storm had communicated with a Venture Capitalist who invested in Tornado Cash, who the Government claims was also based in New York. The defense countered that the Venture Capital firm in question was based in California, and that the defense was aware of merely one text message where the VC communicated with Storm that he was currently in New York, while discussing a different project.

A Dismissal Based on Venue?

"What if the VC said 'I'm in New York and just saw an amazing play on broadway,' you are not going to suggest to me that that’s enough to establish venue,” Failla questioned the Government, who in response claimed to have "months" of texts where the VC in question was based in New York.

"This is the first time we are learning that these are the Government's grounds on establishing venue" the defense stated, noting that the Government had presented different grounds for venue in the indictment, where the Government only alleged that Storm paid a company located in the Southern District of New York to facilitate services for Tornado Cash.

"None of the other points cited by the Government today have been heard by the defense," Storm's council stated, moving for a motion to dismiss, which the Government opposed.

After taking some minutes of consideration, Failla denied the defense's motion, though seemingly reluctantly. "I have genuine concerns about the Government's ability to prove venue in this case," she stated.

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