The DOJ’s recent handling of a case involving Tornado Cash developer Roman Storm has faced significant criticism. Documented in a 111-page brief, the US Department of Justice has filed a motion in opposition to motions made by the developers of Tornado Cash, Roman Storm, and Roman Semenov. The DOJ’s opposition has sparked heated debate over its interpretation of the law and the handling of digital privacy rights.
Critics, such as DEF’s Chief Legal Officer Amanda Tuminelli, argued that the DOJ’s opposition is filled with misinterpretations and misleading statements. Some of these include repeatedly referring to amici, such as the DeFi Education Fund, Blockchain Association, and Coin Center, as “the defendant’s amici” or “the defendant and his amici,” a phrasing Tuminelli claims is unusual and possibly aimed at undermining their credible contributions to the court.
On another occasion, Tuminelli highlights a significant disconnect in the DOJ’s understanding of blockchain technologies, such as how immutable smart contract protocols operate. A striking argument that Tuminelli and others made was that levying serious charges, such as money laundering, against software developers like Storm who have not engaged directly with or solicited conduct from a sanctioned entity amounts to misapplication of the International Emergency Economic Powers Act [IEEPA].
DOJ, SEC Sharpens Focus On DeFi
As the case progresses, the DOJ’s action could potentially influence future legal standards for software developers and the broader blockchain industry. Regulators’ tirade on the DeFi industry is well documented. Three weeks ago, the SEC made its intention clear by sending a Wells notice to Uniswap.
The agency has been looking into Uniswap Labs, the main developer of Uniswap, since 2021. Due to increasing regulatory scrutiny, the decentralized exchange [DEX] has removed various tokens from its platform. Uniswap Labs responded by stating that they are solely responsible for developing the front-end interface of the application. This interface is distinct from the autonomous Uniswap protocol, which is open-source and available to the public. While welcoming regulations, chief legal officer Marvin Ammori stated,
The Uniswap Protocol, web app, and wallet don’t meet the legal definitions of securities exchange or broker. Regulations for crypto—and the clear rule of law that we expect in the US—not arbitrary enforcement and continued abuse of power.
