Paradigm Joins Legal Fight to Defend Tornado Cash Co-Founder

Venture capital firm Paradigm is stepping into the high-stakes legal battle involving Roman Storm, co-founder of crypto mixer Tornado Cash, urging the court to clearly define what it means to operate a money-transmitting business.

In a newly filed amicus brief, the firm argues that the government must prove Storm knowingly controlled user funds and facilitated financial transactions—not simply that he wrote software.

Paradigm’s legal team, led by Katie Biber and Gina Moon, says the prosecution’s stance twists the law and ignores established guidance from the Treasury Department and FinCEN, which have historically held that software development alone doesn’t qualify as money transmission. Holding Storm criminally responsible, they argue, would set a dangerous precedent that could stifle innovation in crypto, open-source tech, and even AI.

The case centers on accusations that Storm helped launder more than $1 billion through Tornado Cash. But since the platform is non-custodial and developers don’t control assets, Paradigm believes applying money transmitter laws here stretches their meaning beyond recognition.

Storm’s trial is set for July 14. One charge was already dropped after a DOJ memo clarified mixers aren’t illegal if developers don’t manage users’ funds. Still, Paradigm warns that convicting Storm could make coders legally liable for how others use their tools—threatening the foundations of decentralized software development.

Alexander Stefanov

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