IRS Agent Testifies on Storm’s Control of Funds

Is Roman Storm and his group of co-founders just creators, or do they control the transactions that goes through the platform.

This is the central question U.S prosecutors have to figure out this week, and the answer to this question would determine the fate of Storm and his associates.

As the Tornado Cash co-founder Roman Storm’s trial entered its eighth day, key testimony from an IRS agent put the spotlight on the question of Storm’s control over funds linked to the cryptocurrency mixing service.

Stephan George, an IRS Criminal Investigation Special Agent, during his testimony stated that after reviewing the transaction records, he found evidence that could prove that the platform has been processing funds from other crypto.com and Binance.

During his investigation, George purportedly found evidence of crypto transfers from a Binance-connected account to Tornado Cash smart contract addresses based on communications among Tornado Cash co-founders Roman Storm, Alexey Pertsey, and Roman Semenov.

This has led George to believe that Storm and his co-founders were actually more than just creators of the protocol, but they actually knew and had control over the transactions that were made on the platform.

Defense Challenges Testimony and Questions Control Allegations

The testimony comes after a challenge from Storm's attorney, which appealed to exclude the testimony of another person, by the name of Hanfeng Lin.

In the statement, Storm's attorneys questioned Lin's authority, saying he lacked the credibility to offer a statement when it comes to criminal crypto proceeds.

"While his accounting background might have provided him the expertise to conduct the analysis he was retained to do, it does not qualify him to testify regarding the tracing of cryptocurrency criminal proceeds. Which the government is not proposing."

Storm's lawyers also pointed out that Lin was previously a victim of a romance scam who previously testified to an out stolen crypto routed through Tornado Cash.

Based on all these points, Storm's lawyers even threatened to seek a mistrial based on these points,

Central Issue: Storm’s Alleged Ability to Control Tornado Cash

A key focus of the case remains whether Storm had the practical ability to govern Tornado Cash’s operations, particularly whether he could block or discourage illicit funds from being laundered through the protocol as alleged by prosecutors.

Another government witness, slated to testify on whether Tornado Cash could be modified to prevent criminal misuse, primarily discussed the platform’s response to sanctions rather than technical controls to deter illicit activity.

Roman Storm faces multiple criminal charges of money laundering, conspiracy to operate an unlicensed money transmitter and conspiracy to violate U.S sanctions related to his role at Tornado Cash.

Prosecutors indicated their intent to conclude their case by Thursday noon, after which Storm’s defense team will begin their presentation.

According to press reports, Storm's lawyers plan to call "two or three doctors" to testify, and possibly an expert witness from Chainalysis.