Paradigm Commits $1.25 Million to Tornado Cash Developer's Defense

Paradigm, a prominent crypto venture capital firm, has pledged $1.25 million to support Roman Storm, co-founder of Ethereum-based crypto mixer Tornado Cash. Storm is embroiled in an ongoing legal battle against the U.S. Department of Justice, facing accusations of facilitating money laundering involving illicit funds exceeding $1 billion.

The case has sparked concerns within the crypto community, with Paradigm co-founder Matt Huang expressing apprehension over the potential impact on software developers. Prosecuting developers for third-party actions could stifle innovation, Huang stated.

In 2023, Storm and his co-founder Roman Semenov were indicted, with prosecutors alleging the use of Tornado Cash for money laundering related to criminal activities, including those linked to the North Korean cyber group Lazarus. Conviction could result in up to 45 years in prison for both developers.

Storm has condemned the charges as an alarming "criminalization of privacy." He asserts that his prosecution stems from developing open-source code facilitating private transactions. Despite a favorable ruling overturning sanctions against Tornado Cash, a New York court dismissed Storm's request to reassess the charges. The court acknowledged the immutability of Tornado Cash smart contracts but emphasized that other service aspects could be modified.

Storm's trial is scheduled for April 14, 2025. The case continues to evoke debate among crypto enthusiasts on the intersection of privacy, software development, and potential repercussions from the prosecution.