Tornado Cash Case Far From Over With Jury’s Mixed Verdict
Herrick counsel, Maxim M.L. Nowak, was quoted in Law360 discussing the mixed decision in the Tornado Cash trial involving whether developers of autonomous software code can be held liable when third parties use their product for criminal activities.
The articled noted that following a three-week trial, the jury found the developer of Tornado Cash "guilty of conspiring to operate the crypto mixer as an unlicensed money transmitting business, but [the jury] could not reach a consensus on whether he conspired to violate sanctions or launder funds through his work on it."
Even with the split verdict, Max said it sends a "clear message" that developers of crypto protocols can't assume immunity from legacy financial regulations simply because they're building a tool primarily governed by autonomous smart contracts.
With the jury unable to render a verdict on two counts, the government will have to decide whether to try again on the sanctions and money laundering conspiracy charges. Max said that while retrial "is on the table," it's possible the government could cut its losses, particularly since it may want to pursue similar cases in the future with fact patterns that might be simpler for a jury.
"Given that the jury was deadlocked, and this is a complex and cutting-edge legal terrain, the government may be smart to conclude that the cost and risk of retrying outweigh the marginal benefit," Max explained.
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