Potential Legal Risks for Open-Source Developers in the Crypto Space
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Open-Source Developers Face Legal Threats
Roman Storm, the innovative mind behind the Tornado Cash privacy tool, has sounded an alarm for open-source developers in the crypto industry. He warns that creators of non-custodial finance software might be at risk of retroactive criminal charges by U.S. prosecutors.
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Storm’s warning resonates throughout the crypto community as he navigates his legal challenges. There’s an ongoing intense debate about whether merely publishing code could be equated to operating a money-transmitting business. Storm poses a critical question to DeFi developers: “Are you confident that the Justice Department won’t classify your non-custodial protocol as a money service business?”
Risks Associated with Open-Source Software Development
According to legal documents and public declarations, Storm contends that U.S. law offers minimal protection for individuals who release software enabling fund transfers. Reports suggest that prosecutors have categorized Tornado Cash as a tool involved in laundering over $1 billion.
Storm challenges the current DeFi developers with a straightforward inquiry: How can you be confident that the DOJ won’t charge you as an MSB for constructing a non-custodial system? If the Southern District of New York can prosecute a developer for such a system, who is safe?
Storm’s defense argues that the protocol is non-custodial, meaning it does not hold user funds. Holding developers accountable for user misconduct could stifle honest open-source development.
The Tornado Cash Case: A Divided Jury in Manhattan
The jury failed to reach a consensus on more severe charges. The U.S. Attorney’s Office pointed to the tool’s extensive illicit use, whereas the defense highlighted that no individual controlled the protocol like a bank manages accounts.
Defense attorneys have filed motions for acquittal, urging judges to consider whether creators of code can be held liable for its misuse by third parties.
The global cryptocurrency market cap is currently valued at $3.64 trillion. Data Source: TradingView
Legal Experts and Community Voices Raise Concerns
According to reports, legal professionals and crypto experts warn that this case could establish a significant precedent if the prosecutors’ stance prevails. Some community members are organizing fundraising efforts to support the legal expenses of the Tornado Cash founder. Others argue that the issue touches on free speech, as publishing code is a form of expression, and holding authors criminally accountable could alter how people create and share software.
Defense Strategies and Technical Defenses
Storm’s legal team emphasizes the protocol’s decentralized and noncustodial nature. They argue that the code operates on public blockchains, and no individual managed a service that held funds in a traditional sense.
Recent court submissions highlight these points and request the judge to reverse the guilty verdict. Prosecutors maintain that if tools are designed and marketed with foreseeable illicit use, legal accountability may apply.
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