Tornado Cash Founder’s Free Speech Defense has been Rejected by the Court

A U.S. district judge ruled last week in the Tornado Cash case, raising significant questions about whether computer code qualifies as protected speech under the First Amendment. In this case, Ethereum coin mixer Tornado Cash developer Roman Storm’s motion to dismiss his charges was rejected by Judge Katherine Polk Failla in the Southern District of New York. Storm had been arrested over a year ago on money laundering charges, and Failla’s decision allows the case to proceed to trial.

Storm’s defense hinged on the argument that code is protected speech under the First Amendment, stating that creating a coin-mixing service like Tornado Cash falls under the protection of free speech. He argued the prosecution criminalizes the development of software, a move he believes contradicts established legal precedents protecting computer code as a form of expression.

However, Judge Failla rejected these claims, emphasizing that Storm’s charges were related to his alleged involvement in money laundering, operating an unlicensed money transmitting business, and sanctions evasion. These are areas of law that, according to Failla, do not target “protected expressive conduct” but rather specific illegal activities, thus removing them from the scope of free speech protections.

Failla also addressed the broader debate surrounding code as speech, acknowledging instances where code could be considered expressive. Yet she maintained that the functional aspects of code, when used to facilitate criminal activities, are not protected by the First Amendment. Legal experts pointed out that arguments linking code to free speech have often been rejected in cases where the code is used to further criminal actions, comparing this to prior rulings in material support for terrorism cases.

In addition, despite Storm’s claims, Failla indicated that even if his actions were deemed “speech,” the government’s case would pass “intermediate scrutiny.” This legal test shows that laws regulating his conduct are designed to serve a substantial government interest, in this case, ensuring a secure financial system.

Privacy advocates, including whistleblower Edward Snowden, criticized the U.S. government’s decision to sanction Tornado Cash in August 2022, arguing that it represents a crackdown on privacy tools. Despite this backlash, Judge Failla remained focused on the specific criminal charges against Storm, not the broader implications for privacy or free speech.

Storm’s supporters continue to raise funds for his legal defense, arguing that writing privacy code should not lead to government prosecution. Even Ethereum co-founder Vitalik Buterin has voiced support for the developer. However, the case, which is expected to go to trial in December, could still allow Storm’s defense team to reassert free speech arguments, depending on how Failla decides to proceed at that stage.

In sum, this case highlights the tension between the right to free speech and government efforts to regulate financial crime in the rapidly evolving digital asset landscape.