In a ruling by Judge Katherine Polk Failla, the prosecution's charges against the operator of the coin-mixing service, Tornado Cash, were found to be plausible. The charges include operating an unlicensed money transmitter, facilitating money laundering, and sanctions evasion. The judge clarified that the ruling assessed the merits of the charges, not the guilt of the operator. The operator argued that Tornado Cash did not have sufficient control over funds to be considered a money-transmitting business and that there was no sufficient evidence of willful conspiracy to evade sanctions. The judge stated that she must accept the allegations at this stage of the case. Tornado Cash was sanctioned in 2022 by the US Department of the Treasury for aiding money laundering. The court also denied the operator's motion to compel communication disclosure between the Department of Justice and Dutch authorities. In a separate case, the developer of Tornado Cash, Alexey Pertsev, was found guilty of money laundering by a Dutch court and sentenced to 64 months in jail. Critics argue that such cases could have a chilling effect on free speech and the development of crypto projects. The judge stated that the functional capacity of code is not protected under the First Amendment, distinguishing it from expressive coding that would merit protection.



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