A U.S. district court judge has delayed the money laundering trial of Tornado Cash co-founder Roman Storm, over the objections of the prosecution.

In a ruling Friday, Judge Katherine Polk Failla of the Southern District of New York (SDNY) granted the defense's request to delay Storm's trial by three months.

The defense cited the "complex and novel legal and factual issues," in its request to push the trial back, as well as "millions of pages of documents," produced during discovery, adding that many of the documents "are in Russian and require translation."

In a filing objecting to the defense's request to delay, the prosecution argued that "the public interest strongly favors a speedy trial," and that the defense "vastly inflates" the volume of documents produced in discovery.

Storm was arrested in August 2023 and charged with conspiring to operate an unlicensed money transmitter, facilitating money laundering and sanctions evasion, for his role in co-founding and operating the coin mixing service Tornado Cash.

According to a report on court proceedings from The Rage, oral arguments presented by the defense and prosecution during Friday's hearing point to some of the key legal questions under discussion, including whether a decentralized, autonomous service running on smart contracts can be said to be under the control of its founders.

Storm's defense attorney Keri Axel reportedly argued that Tornado Cash wasn't established with criminal intent, did not enter into any agreement with the criminals who laundered money using the service, and did not have control of user funds.

Judge Failla reportedly seized on the latter point, asking prosecutors "What should they have done?" once the Tornado Cash founders were aware that North Korean hackers were using the service. "If [Tornado Cash] has 1,000 customers and 1 is a bad actor, are they criminally liable?" Failla added.

In May, Storm's fellow Tornado Cash developer Alexey Pertsev was found guilty of money laundering by a Dutch court and sentenced to 64 months in prison. Pertsev, who has appealed his conviction, was denied bail by a Dutch court on Friday.

What are coin mixers?

Coin mixers such as Tornado Cash are decentralized services that enable users to mask the origin and destination of transactions.

Advocates claim that they have legitimate uses. One of the main arguments is that because blockchains such as Bitcoin and Ethereum are public ledgers of transactions, pseudo-anonymous user identities can be linked to real-world identities through processes such as know-your-customer (KYC)—exposing that user's entire transaction history.

Critics argue that obfuscating details of transactions makes coin mixing services attractive to cybercriminals seeking to launder illicit funds. In 2022, the U.S. Treasury Department issued sanctions against Tornado Cash, claiming that it had been used to launder "more than $7 billion worth of virtual currency since its creation in 2019" by criminals including North Korean state-sponsored hacking group Lazarus Group.

The arrests of Storm, Pertsev and other coin mixer operators such as the founders of Samourai Wallet has had a chilling effect, with several privacy preserving crypto services either shutting down or abandoning the U.S. in response.

Edited by Stacy Elliott.