DeFi Fund Urges Trump to Stop Tornado Cash Developer’s Prosecution

The crypto lobbying group DeFi Education Fund has appealed to the administration of U.S. President Donald Trump. Its representatives requested that the administration put an end to what they called the “lawless prosecution” of open-source crypto platform developers.

Among them is Roman Storm, one of the creators of the crypto mixer Tornado Cash.

What will happen to the creator of the Tornado Cash mixer

In an April 28 letter to White House counsel on crypto and artificial intelligence David Sachs, the group urged Donald Trump to “take immediate action to end the Department of Justice’s campaign under Biden to criminalize open source software development.”

The letter mentions the case of Storm, who was accused in August 2023 of helping launder more than one billion dollars through Tornado Cash. His trial is scheduled for July, while another co-founder of the platform, Roman Semenov, is still wanted, allegedly hiding in Russia.

DeFi Education Fund officials said that in Storm’s case, the Justice Department is trying to hold the developer accountable for how others use the code he created.

Not only is this absurd in nature, but it sets a precedent that threatens the entire cryptocurrency community in the United States.

The group also pointed out that this prosecution contradicts FinCEN guidance issued by the Treasury Department during President Trump’s first term.

It states that developers of autonomous p2p protocols are not considered money transfer operators.

In January, a federal court in Texas ruled that the Treasury Department exceeded its authority by imposing sanctions on Tornado Cash.

The group thanked Trump for his support of the industry and his stated goal of making the U.S. the “cryptocurrency capital of the planet.” The letter emphasizes that this goal is unattainable if developers continue to be prosecuted for creating tools for new technologies.

We ask President Trump to protect American developers, restore legal certainty, and stop this unlawful arbitrariness by the DOJ. The work is not yet done, and the cost is too high.

Variant Fund General Counsel Jake Czerwinski called the case against Storm “an outdated relic of the Biden administration’s war on cryptocurrencies.” His statement appeared to be as follows.

There is no legal or political reason to prosecute developers for launching autonomous smart contracts.

At the time of publication, the organization’s petition has already been signed by 232 industry members, including Coinbase co-founder Fred Ersam, Paradigm co-founder Matt Huang and one of the key developers of Ethereum Tim Beyko.

ICO money scandal

Unfortunately, scandals involving the fraudulent use of funds are still relevant in the crypto industry. Today, it has come to light that the founders of cryptocurrency company Bankera used funds raised during an ICO in 2018 to buy luxury real estate properties around the world. This is the subject of a report by the Organized Crime and Corruption Investigation Project (OCCRP).

Almost half of the 114 million dollars raised by Bankera was transferred to a bank in Vanuatu, which was acquired by the founders of the project themselves – Vytautas Karalevicius, Justas Dobriauskas and Mantuas Mockevicius.

Shortly thereafter, a bank in Vanuatu began making multi-million dollar loans to companies owned by the three, to build a portfolio of luxury real estate. These included a villa on the French Riviera and properties in Lithuania, where the project was based.

These funds were used to secure loans to other companies, through which expensive real estate was then purchased. According to OCCRP, a bank in Vanuatu also lent millions more euros directly to the founders for “personal use.”

Lawyers representing the founders said the ICO was not fraudulent, but declined to comment on individual transactions.

As a reminder, Bankera has stated its intention to become a “bank for the blockchain era,” offering a suite of investment services for retail and institutional clients with the ability to store and exchange cryptocurrencies. Many investors became interested in Bankera token (BNK) due to the promise of discounts on the company’s products and services, as well as weekly payouts.

Although as one ICO investor told OCCRP, these payments soon began to “drop significantly from the promised level.” In addition, Bankera promised to obtain a European Union banking license, but that never happened.

Despite the fact that the ICO raised more than $100 million, BNK’s capitalization currently barely reaches the $1 million level. Bankera continues to provide cryptocurrency-related banking services and maintains social media activity – particularly on LinkedIn and, to a lesser extent, Twitter.

The bottom line

The Tornado Cash story raises an important question: can developers be judged for how others use their code? As the cryptosphere struggles for recognition and justice, high-profile cases like this one continue to shape the legal boundaries of the industry. And the sooner those boundaries become clear, the faster the technology can move forward