Roman Storm trial rocked by tracing errors and mistrial calls
As the trial of Tornado Cash developer Roman Storm continues into its second week, crypto forensics experts have raised doubts over the credibility of evidence presented by the prosecution.
Independent investigators decry clumsy tracing efforts, the use of a report from a dodgy forensics company shut down by the feds, and dirty tricks from the prosecution, in what many characterize as a battle for code as free speech
Calls for mistrial after ‘bumbling’ efforts to trace funds
After Storm’s lawyer David Patton called for a mistrial at the end of Monday’s session, blockchain sleuths dug deeper into what the prosecution presented as the laundering of scam victim’s funds through the Tornado Cash mixer.
The validity of testimony presented by the government’s first witness, Katie Lin, was scrutinized over the weekend by MetaMask’s Taylor Monahan, who has spent years tracing funds from large-scale pig butchering schemes, such as the one Lin fell victim to.
Monahan’s analysis was endorsed by fellow investigator ZachXBT.
Read more: Coinbase says staff leaked customer data, refuses to pay $20M ransom
Monahan identified Lin’s transactions and traced them to an “instaswapper” service used to hop between blockchains.
She says it’s “fully inexcusable” to then claim to have continued tracing funds, as the ongoing transactions (which later link to Tornado Cash) are simply the result of “an unknown input from another chain.”
Coinbase’s Conor Grogan, who traces forgotten funds in his free time, also analyzed the transactions.
Despite the transaction hash provided as evidence being apparently unrelated to Lin’s case, he suspects that investigators mixed up decentralized exchange swaps as transfers between individuals.
According to a report from The Rage, even one of the prosecution’s own blockchain experts was unable to directly connect the victim’s transactions to Tornado Cash.
The prosecution claims that its “expert” witness, “IRS Agent George… will testify about the few short hops to Tornado Cash.”
Monahan is clearly confident in her tracing, and suspects that testimony “would be explicit perjury or career suicide.”
Dodgy crypto recovery company shut down by feds
Further doubts over the credibility of the prosecution’s evidence base were raised when X user William J. Jones looked into Payback, the company Lin states she hired to trace the funds.
Jones noted that Payback LTD was one of three “cryptocurrency recovery services” whose websites were seized by the FBI last year.
The press release explains that these companies “often advertise strong success in recovering victim funds but have no track record in doing so.”
In charging “significant upfront fees and… a commission should funds be recovered” they are effectively “further defrauding cryptocurrency scam victims.”
Prosecution accused of fighting dirty
Storm’s case has made the developer something of a martyr figure for privacy and open-source software advocates who see the trial as the “most important case in crypto”.
To many, it feels like an unnecessary show of force, especially after the Fifth Circuit Court of Appeals deemed that the Office of Foreign Assets Control’s (OFAC) sanctions against Tornado Cash “overstepped,” and ordered their reversal in January.
The prosecution was accused of fighting dirty in the run-up to the trial, seeking to remove some of the defense’s “expert” witnesses, claiming they would “waste time” and “confuse the jury.”
Read more: OFAC ‘overstepped’ on Tornado Cash sanctions, court orders reversal
During the first week, CoinDesk reporter Danny Nelson accused the government of “weaponizing” Telegram messages from a CoinDesk-Tornado Cash group chat, which were misconstrued as evidence of Tornado Cash developers discussing how to launder stolen funds.
In yesterday’s session, FBI agent DeCapua dismissed the use of VPNs as something a “regular person” wouldn’t use.
Developer and Security Alliance member Pascal Caversaccio warns against this kind of characterization: “Treating privacy like a red flag is how we normalise surveillance.”
Next, the prosecution plans to sneak in know-your-customer (KYC)-related testimony after both KYC and anti-money-laundering arguments were banned in pretrial proceedings, according to The Rage’s L0laL33tz.
Despite the ongoing use of the mixer to launder stolen funds, even during the trial, Storm has continued to distance himself from such activity, including by returning a $24,000 donation from the eccentric Cork Protocol hacker back to the affected team.
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