Is Coding a Crime? Roman Storm Tornado Cash Verdict

Transcript

All right, Banklist Nation, we are live with Peter Van Vulcanberg from Coin Center and David Morris from The Rage. Peter, you've been on the show before. David, you're brand new. David, you have been reporting, doing some of the most in-depth reporting in the front lines in the courtroom uh with the Roman Storm case. Uh we are I think this it took four plus weeks for all of this to wrap up and we just got the verdict um just a few hours ago.

>> About three and a half weeks. Yeah. >> Three and a half weeks. Yeah. Just as a um naive non-legal legal-minded person. My summary of the verdict so far is mixed with definitely cause for concern. I think if we are um primarily concerned with Roman storm the individual uh we are happy he is flying home to Seattle tomorrow to spend time with his daughter uh and but the story is not over as as an industry a crypto industry there are things to be concerned about and the fight continues that's kind of my summation of everything maybe you can give me your immediate thoughts and reflections since you were just there and you watched things go down firsthand. Yeah, I I think that um the verdict reflects

sort of the a really thorough chaos at every level of this proceeding from start to finish. Um there were really constant fights and constant uncertainty about which um witnesses would be admitted um what they would be allowed to talk about within some very fine grain lines. Um, just to pick one example off the top of my head, um, there was considerable discussion and debate over whether um, evidence could be allowed that, um, crypto holders were threatened with kidnap or physical danger because of the public nature of blockchain addresses.

Um and in fact, one um witness for the defense was uh sort of talking about hiding his investment portfolio online and not wanting to have a quote unquote target on his back. And then there was a big objection and that was taken as like some metaphor for physical threat. This is just one example of like things were being fought on a momentto moment basis with incredible precision about the nature of the language being used around every charge. Um and at the same time the government um had some real problems with the evidence that it did get in um particularly you know reliable tracing of whether certain transactions ever actually connected to tornado cash. Um, one of the jury questions that came back

very late in the process, um, was having to do with whether intermediary wallets that connected, um, a big hack to, um, the, uh, sanctioned North Korean hackers and in turn to tornado cash. The question came up from the jury, are these intermediary wallets also sanctioned? Um, and this is just one example of very fine details um that sometimes were glossed over by the prosecution. Um, and uh I think the the the sort of confusion of the the verdict which on two counts was no verdict at all. Not not guilty, not guilty, but no consensus could be reached. I think that that um really does reflect um both the

ambiguity of a lot of what they were being tasked with interpreting um and just the general complexity and difficulty of the case um as well as I think some probably um some skepticism on the substance from the from the jury for sure. >> So maybe just to provide maybe a map for listeners to really understand and navigate this question. There are three counts that we need to pay attention to and each one of these things is a conversation in and of itself. And on each one of these things uh is there's just confusion generally. So maybe I'll I'll turn to Peter. Peter, can you talk about the three counts that uh Roman was up against and what happened on the outcome of each individual one? And we'll just keep it high level at first

and we'll kind of dive into them. Um >> yeah, >> as we go on. So simply stated, all three counts are conspiracy charges. I want to say that off the bat, which means you don't have to prove that they did the target offense. You have to prove that they agreed with others. So it'd be Roman. It might be Alexi Perzovv, the developer that was charged in the Netherlands. It might be other co-conspirators unnamed as well. You need to prove that Roman agreed with these other co-conspirator conspirators to do the offense and took one tangible step towards that offense. And then what are the three offenses? The first one is money laundering. So that's knowingly

and with intent hiding the proceeds of some illicit activity, some crime. So you're making it hard for law enforcement to investigate the trail of money in a crime. The second is unlicensed money transmission, which and I'll probably talk the most about this one, and this is also the one where he was found guilty. The only charge that that stuck for the jury, where this one is you were um transmitting money and you didn't have a license. And in the specific subcharge of unlicensed money transmission, it was transmitting money without a license and knowing that the money you're transmitting is the proceeds of crime is

a is is an illicit transaction. And then the third charge was evasion of sanctions. And so what's specifically alleged in in that charge is well we know that North Korea used tornado cash. North Korea that, you know, the Lazarus group, the hacker group, um, after they hacked the Ronin Bridge used tornado cashache to hide their, um, their hack, North Korea and the Lazarus group are a sanctioned entity. So, you conspired to evade US sanctions along with others which ostensibly could even extend to North Koreans.

>> And so, it's conspiracy in all those cases. And, you know, the case is incredibly weak in a lot of regards. first and foremost among them just with respect to conspiracy like there isn't evidence that Roman, you know, got on the phone with somebody else in the world and said, "Ah, I know you've got some you've got some illicit funds. You've got some proceeds of crime. I'll help you hide them." That that's that's a simplistic view of moneyaundering. That's what a jury expects with moneyaundering. Nothing to that effect in this case. you know, there's a lot of allegations of of, you know, he he produced this software. He he knew that people would be using this software in a certain way and therefore he should be culpable, but that's a very different

legal standard than proving agreement and a tangible step towards committing the crime. Um, we can talk more about why the unlicensed money transmission charge is particularly upsetting to me and that is the one charge where he was found guilty. the first and the third charge, the money laundering charge and the sanctions evasion charge, we got a hung jury. And that means that, you know, under the sixth amendment of our constitution under New York law, you need unanimous juries in order to find that someone is guilty of a crime. And actually also to find whether someone's not guilty. And if you can't force the jury to agree, if they can never come together, then you get a hung jury or a mistrial for that count. And um David, you were there all day and know better

than I. And thank you so much for your reporting by the way, David. You and the Rage have done Yayman's work in helping people like me in Washington DC stay informed about the case. But >> the judge even gave the jury an instruction saying, "I need you guys to reach an agreement." Yeah. >> And the defense pushed back on that, said they shouldn't be forced to reach an agreement. And then ultimately the judge gave the instruction, but the jury still wouldn't agree on those first and third charges, which I think just speaks to, as David said, the confusing case presented by the government and the very weak legal ground that they were on as far as like showing that he was actually culpable of these crimes.

>> So just just to recap those three counts, right? So the first count was hung jury, not unanimous. The third count was I I I thought it was not. Oh, it was the Yeah, it was misreported. The what I'm sharing on the screen was misreported. So, the first and third were uh unanimous >> jury and basically that means you don't you don't have agreement. You need a complete agreement for those >> and you're you're not guilty. The ramification does mean that the government can regroup and choose to reprosecute. Uh which would be bad.

>> But that would be their choice. The DOJ would have to continue to be as aggressive as the DOJ has been with respect to this case and continue to pursue that. Now the second count was guilty >> and as I understand it high level let's talk about like for Roman right there was uh the max charge was like 45 years of jail time for across all three of these uh counts. >> Yes. >> And so the but um since the first and the sec and the third were hung jury the the second where he was convicted as guilty by this jury actually is five years in prison. Is is that accurate?

Maximum, of course. >> Okay. >> All right. So, he he um some scarier ones, I guess, for Roman were avoided in this case, which is I guess part of the I know I I don't know if this is a silver lining here or like how we're actually viewing the outcome. But I don't know what what I'd like to do maybe first is hear David when when that the judge was going through this in the courtroom cuz you were there like what was the atmosphere? What was what was kind of going on? What did Roman look like? What did the prosecution look like? I I I saw a quote like the judge has to instruct the jury and all members in court to like show no emotion. So, I don't know if that held.

>> Um, well, first of all, I would I would add one other item to your inventory of like silver linings or whatever you want to call them, which is um that the prosecution did after the verdict was was sent in um make a motion to remand Roman to uh jail while he awaited sentencing on the one conviction charge. Um they made the argument that he was a flight risk because of his inter international connections and access to capital and resources. Um the uh the defense made the counter-argument that, you know, they were planning to appeal this. Um and ultimately the judge did not choose to remand him to custody.

He's going to be out on bail. Um it's secured against his house in Seattle. Um, and what was very interesting about that moment was, and this is the big silver lining, I think of this for everybody, not just Roman, is the the judge said, um, just in open court while we were there observing, um, that there were many roads to appeal on this particular conviction count. I'm sorry, my cat is being insane here. Um but the but Judge Flet said that there are many many interaction here >> many options for appeal essentially. Um she she just acknowledged it directly.

Um and that was in fact part of the logic of her choice um not to uh remand Roman to custody uh while awaiting sentencing. Um she basically gave a certain amount of a vote of confidence to the appeal uh that is is likely to be filed even on this count. Um, but as to the bigger question of atmosphere, I think that um I would define for the most part the atmosphere as very professional um on all sides and Roman was extremely stoic for most of the trial. Um, and I I think that um it probably was to his his advantage. He didn't show a lot of like, you know, stress behaviors or anything like that. Um, you my my main point of reference for a lot of these things is

um the Sam Bankman Freed trial and and Sam sort of notoriously was like twitching and playing on his laptop for the entire thing. Um and uh and Roman was not even doing not not not doing anything really just like closely observing. Um I will say that um it was pretty interesting uh in the last couple of days um I think maybe it was Monday uh there were you know a long period of you just wait in the empty courtroom for the jury while they deliberate and for the journalists you're kind of sitting there waiting for that verdict to come back so you can then go and you know report it and have your afteraction report and and and let people know. Um but the the council and Roman himself were also sitting there for a lot of the

time while we're waiting on this verdict. So you you know you sit there and you see this guy waiting to see what's going to happen with his life. Um and he was very stoic through much of that. But then starting on Monday, he actually sort of was mingling with um you know there were there were supporters there in the gallery um observing the trial um and and he sort of very briefly and to a certain extent I I'm not sure whether this is like entirely kosher or appropriate but you know he he seemed in fact somewhat relaxed um he he seemed to be really optimistic as the jury debated and there was reason for this because one of the sort of rules of thumb of uh criminal trials is that um you know in a guilty verdict the jury generally comes back

very quickly. If they've made up their minds and they they especially if they've decided guilty um they tend to come back quickly. Um the uh the Safeoon trial um which happened recently I think the jury took four hours to reach a conclusion. Um I think in SPF it might have been as little as like 3 hours. Um and so then by the time we were coming to um Monday and the jury by then had already been in deliberation for almost 10 hours um and was in its second day and even began like you know by Tuesday we had a h no by the end of the day Monday the jury was trying to figure out its schedule for the entire week which

was really striking. We had one juror, juror number um five I believe, who had a heart out at the end of this week, so she would have had to leave. Um which would have meant actually adding in an alternate juror who hadn't been present for deliberation and restarting the entire deliberation process. >> So that was one factor. On Tuesday, a juror had a grandmother whose 90th birthday was happening >> and a pedicure appointment. a pedicure and unfortunately the pedicure had to go. Um, and so on Tuesday morning they were there for half a day. Um, and uh, and you know, we were kind of digging in and I was starting to frankly feel a little bit of uh, despair

at my fate. Um, but uh, it it did come in a little bit sooner. Um, and yeah, so I guess my summation would be that it was actually like I think that Roman was feeling optimistic towards the end and it turns out somewhat rightly so certainly for for his own, you know, sake. In addition to everything you said, you just said, we have this tweet from Eleanor Terret who tweeted out that she saw a Roman storm coming out of the the classroom and she excuse me courtroom courtroom.

>> It feels like a classroom a lot of the time, >> not going to lie. >> Uh she said in a quiet voice, but with a noticeable smile, Roman said, "It's a big win. The 1960 charge, which we'll get into, is and we're going to fight it all the way." Uh, and so I think and like I was actually able to meet Roman uh just for a dinner this last weekend and and he feels very convicted in that he has a 99% chance. This was before the out the the verdict was ever read that he had a 99% chance of a mistrial because of shenanigans that were going on in the courtroom between the prosecution and the judge.

Uh, and the he he alluded to the fact that the prosecution and the judge seemed to be very friendly and there was um uh yeah, I guess shenanigans might be the best word. Maybe you can comment on on if what you saw as it related to anything anything messy in the trial, David. >> I mean, a lot was messy and and you know, with with all due respect to Roman though, I will say I think that um Judge Fila did throw a lot of decisions to the defense as well as the prosecution. um and and some were pretty substantial in terms of like setting the table in a way that um let them get their point across.

So I mean for example um on this question of crypto kidnappings and and blackmail and things like this. So obviously the defense wants to like put forward the broader context of there's a privacy issue here with life on the blockchain. Um, and this product was created to fulfill a very specific need. And there was this kind of like entirely noncriminal reason that Roman Storm was building this tool. Um, and and part of how they, you know, sort of ideally wanted to drive that home was to, you know, make reference to some of the crimes that have been committed against people whose holdings were were visible on the blockchain. Um and uh you know, Judge Fila, I think there was some

misinterpretation, frankly, online of this motion in particular where Judge Fila, you know, ultimately said, "The reason this matters is how much it speaks to Roman Storm's state of mind when he was creating Tornado Cash because again, this conspiracy charge is about their men's rhea, their state of mind, both during the creation and then to a certain extent ongoing in their operation of elements of the tornado cache system. Um and and so what she allowed was anything that predated or coincided with the 2020 to 2022 period that was in question for the trial. She said, "You can bring this up because it's plausibly an influence on Roman Storm's state of mind." And basically

she did let the jury let the defense bring that in in a certain to a certain extent um to show that this privacy issue was part of what shaped Roman's thinking for building the tool. So um you know I I certainly and to be clear you know we only have access to what's going on in this is the third time he's tried it guys. This is Steve everybody say hi. I don't know what to do about the situation. Um but uh you know anything that so she she just to say that Judge Fila um we don't have access to anything that's not happening in open court but Judge Fila um to my observation of that part of the proceeding um was really calling balls

and strikes. Um and you know it's it's worth keeping in mind that at various stages she she has you know expressed um skepticism of the government's case in proceedings. um that I think shows her open-mindedness. Um inevitably the SDNY lawyers, the the prosecutors inevitably have a better relationship with the judge um than the defense. Um this this prosecution team specifically included Thane Ren, who was part of SPF's uh prosecution team, and he, you know, they they just tried cases in this courthouse full-time. They cross paths with these judges. Um the defense team I think

mostly is based in California closer to Roman. Um so they don't have that kind of intimacy with the judge on an individual personal basis. Although I will say the judge also seemed quite personally fond of um one of the defense lawyers um gosh why am I forgetting her name? Uh Axel car uh Carrie Axel. Um they they had some good banter you know. So even on a personal level, the judge was not like icing the defense or anything like that um that I saw. So >> yeah, I don't I don't think there's there's shenanigans at stake. I I would say that, you know, Judge Fail actually had a prior career as a prosecutor >> and did prosecute unlicensed money transmission crimes in the SDNY. So,

>> you know, this is her territory. And I think some of that goes to maybe informing her legal reasoning, which I think is wrong. Um, but you know, it's our that's the way our judicial system works. The judge rules on the law and that could be appealed and so there's just absolutely nothing inappropriate there. But I think >> I think she was in many ways a tough judge for Roman to have, but a fair judge and it's time to appeal that bad legal reasoning, which we'll get to later on. Yeah, >> we could still appeal the count that he was convicted on. That's still >> And they will. And they've said >> and they will. And what's the probability that that >> and not only Yeah. Not only that, but and this is something so to go back to Roman's statement that Eleanor reported.

It's a big win. The 1960 charge is and we're going to fight it all the way. You know, I I'm glad he's feeling optimistic. I'm glad he wasn't thrown in jail immediately. That was an important uh procedural step. He's right. It's Um, you know, Coin Center's been ringing the alarm bell on 18 USC 1960 and unlicensed money transmission prosecutions now for years, including working with Fininsen in 2019 to make sure that when they offered guidance on who's a money transmitter and needs to get a license in the crypto space, they offered really clear guidance that said the only people who need to register under our rule set and we're the money transmitter regulator at the federal level are people with total

independent control of customer funds and you know Roman built some smart contracts and maintained a front end but never had any control of customer funds. >> That was 2019 guidance that Fininsen the only guidance that Fininsen which is the regulator of this territory has ever provided crypto has been basically that if it's non-custody these things don't apply to you. >> You don't need to go get a license. You don't need to register with us. You don't need to worry about doing AML KYC. And so the question is if if that's been the law since 2019, if Roman's lawyers, because he had lawyers when he was building Tornado Cash relied on that guidance and gave him regulatory counsel, if others in the space like

Uniswap or God knows who else relied on that guidance, why are people being prosecuted? >> Okay, but here's what I don't understand. Why couldn't the prosecution just be like, here's our case. It's here's the guidance that was given us. Here here's the rulem from a regulator. Like Roman doesn't hit any of these boxes. >> You mean the defense? Yeah, >> the defense. Excuse me. Case closed. How is that not case closed? >> They did. And this goes to some complex issues here. So, what we just learned about is the jury's verdict of the facts. But to me, one of the biggest um losses in this case was actually last winter and it's when Judge Fail ruled on the motion to dismiss and the defense in the motion of the dismiss on the

unlicensed money transmission charge said, "This is absurd. you know, you're you're accusing him of unlicensed money transmission, but the regulator on point said that someone without total independent control doesn't need to license with us. So, like this this charge is utterly inappropriate and should be should be thrown out on legal grounds, not even fit for a jury to to rule on. Judge Fail agreed with the prosecution ultimately that the criminal code which is 18 USC1 1960 has a different definition of money transmission than the bank secrecy act which is the regulatory code that Fininsen offers guidance on and that they overlap but are not fully you know coterminus

>> and so criminal code can be interpreted broader than the federal regulations under the bank secrecy act and therefore they can proceed with this prosecution. >> Wow. Someone should have mentioned that in the rule making. I mean, come on. >> Wow. >> Well, and and it speaks to a lot of things that I think are going to come up on appeal. Um, and to Roman's sort of energy about that appeal is there's a massive due process issue here. You know, in this country under the due process clause of our constitution, you can't be held culpable for a crime if the law was not clear on the books as to what course of conduct you were and were not supposed to take. Right? And not only do we have a lack of clarity, we have basically contradictory statements from the regulator you'd get a license from and from the prosecutors who they

who then say, "Actually, you did need a license even though the regulator told you not to." And you have these conflicting definitions. You have ambiguities between the criminal code and the regulatory code. And when you have ambiguities, what are you supposed to do as an innovator? you're supposed to say, "Oh, well, should I listen to the regulator or should I read the criminal code myself or have my lawyer read it and just think about the worst way a prosecutor would squeeze that to to hurt me?" Now, if you're very riskaverse, you might do that. And those are all the people who decided not to build tornado cash, right? Even though it's a good tech to build and on the law, another thing that should be brought up on appeal, apart from due process, is lenity. If there's ambiguity in the code, like we don't know exactly

what the word money transmission means because the regulator defined it one way and the criminal code you suggest defines it another. If there's ambiguity and someone's liberty is on the line, the rule of lenity in judicial theory in an American constitutional practice says that you have to interpret it in the way favorable to the person whose liberty is on the line, which would be a narrow definition of money transmission, not one that allows them to go after effectively anyone. So that aspect of this prosecution has always been hyperaggressive and it really does stem back to the origins of this prosecution which is the prior administration. It's not exactly like there was a massive conspiracy against crypto but we as we know from looking at Gendler at the SEC from the policies at Treasury from the investigations into other DeFi protocols

and from the prosecutions of Roman and the Samurai wallet developers which was a Bitcoin privacy wallet. there was a lot of energy going after crypto and some of that slowed down, some of that stopped. You know, we got to a point where now with the SEC, Hester Pur, the commissioner is issuing amazing speeches about the importance of financial privacy in crypto, but it hasn't fully slowed down. It hasn't fully stopped. >> So, Peter, if it was if it is so obviously BS, right, you could understand what like there's a world where you see why the DOJ and prosecution went after Roman storm in this way and maybe even failure. you're like allowing this case to continue, but what was in the jury's head? I mean, they still gave a guilty verdict. Why?

>> They don't have much of a choice on that count, right? So, on the counts where they were hung, where they were unable to to agree, there were higher bars of proof for the government. Um, if you're going to say someone's, you know, guilty of moneyaundering, you have to show that they had some specific intent to actually hide some specific proceeds of crime, right? And the best that we we can see from any of the provided evidence is that they had some general knowledge. Roman had some general knowledge that the tools he's building might be used for those bad things. Just like if I build um if I build a safe like a guy might put stolen jewels inside of it. Like I can imagine >> entire Ethereum network.

>> Yeah. Yeah. Like Yes. Anyway, so the standard is a little bit higher there. And I think it it's it's it's clear that the jury struggled with voting yes uniformly that the prosecution met their burden of proof with respect to men's rehea. With an unlicensed money transmission charge, the standard for whether you knowingly transmitted illicit funds is lower. And there's a reason for that because there's a predicate to that. It's not just I'm a normal guy walking around in the world and oops, I knowingly like took some money from a drug dealer and then used it to buy a can of coke. No, the low standard for knowing that you're dealing with criminal funds only comes into play

if you are not a normal person. You are a financial institution. You are an entity who holds itself out accepting and transmitting customer funds. Your credit Swiss and Russian oligarchs show up at your door. You have some due diligence to do. You can't just be like, "La, I'm gonna move this money." And so that lower standard that the jury found the prosecution met, that might be fair, and the jury's determination might be fair if Roman was a money transmitter, if he had day-to-day exposure to other people's money and actual control over it, but he didn't. And so applying that standard and asking the jury to judge him by that standard is inappropriate.

And it's not the jury's mistake, it's a legal mistake. And that legal mistake goes back to those motions last winter when Judge Fail said, "Yeah, I know Fininsson said that this isn't money transmission, but the definition under the criminal code is broader. So, I'm going to treat him as a money transmitter. I'm going to say that he's a money transmitter, and now this lower standard for the jury will apply." >> Wait, so you're saying that the jury was basically given instructions to say that first of all, jury, Roman's activity was a money transmitter. Now based on that criteria now render this judgment on this 1960 count.

>> They were given standards to say that money transmitters includes people who who have you know sort of secondary or tertiary involvement in the transfer of funds not necessarily just people who have total control over over customer funds which is Vincent standard. So they were given what I think is an incorrect interpretation of money transmission and then mostly given this task to focus on this low burden of proof for knowledge of elicit funds. And I think that's, you know, and I'm speculating because I don't wasn't in the room like, you know, with the jury uh deliberations, but I'm speculating that the jur that the jurors were able to come to unonyimity on that lower standard of culpable conduct, which is relevant for money transmitters, but we're unable to come to agreement on those higher standards

for culpable conduct for, you know, money laundering just as an individual or for sanctions evasion as an individual, not with that heightened standard. And and Peter um would you summarize the difference in the standard as being between knowledge of and intent to? >> Yes. Yes. The intent requirement is important in the anti in the moneyaundery uh charge whereas it's more of just a knowledge standard in the money transmission uh case. And if I could like >> and it makes sense like like think of it intuitively again go back to credit Swiss like credit Swiss probably doesn't intend to launder oligarch funds but if they have knowledge of it and they don't you know take action and they're a money

transmitter they should be culpable for that activity right they had some due diligence and they failed it but a normal person unless you intend to actually hide the proceeds of crime if you just merely know that you've been handed some proceeds of crime and then transact with them then it's a then then then that applying that lower standard as culpable conduct doesn't make sense from a liberty standpoint, just from a freedom standpoint. >> And if I can sort of extend the the thought experiment about kind of the jury's state of mind and and what they'd been shown in court, um I mean I think that that in that question of intent is is key. Um and was really focused on by both the prosecution and defense in closings. Um and that sort of brought in um a few things that I think are going

to be very interesting to on both sides to your listeners in particular. Um, so the prosecution really worked hard to show that or to to draw out examples of um, Roman and the others um, kind of talking about um, criminals and and the impact after the fact in particular of like we're going to get in trouble basically because we're seeing these reports that Ronin has been funneled through tornado cash, things like that. Um going back a little bit further, probably the most um damaging bit of evidence on that intent question um for Roman from presented by the prosecution was some people might already be

familiar with this t-shirt that tornado cash created circa 2019. Um this is very early if I'm not mistaken. This was actually at the hackathon where they initially created the protocol or an early version of the protocol. Um they wore these t-shirts. that had a washing machine and the tornado cash logo um and various slogans about I think one of them was if you want to know how to keep your Ethereum private ask me something to that effect. Um and the prosecution really went to um to the mat to make the point that this washing machine is a very literal metaphor for money laundering. And so this came forward as their sort of um evidence for you know this was a criminal enterprise from the

start run as a criminal business. Um and I think it's quite notable that we did have the split verdict because you know the evidence presented by the defense on the other side of that men's ray of question was um Ethereum community uh sentiment that was cited by a lot of defense witnesses to the effect of the importance of these privacy products for users of the system. Things like um Vitalic having communicated with Roman about the importance of privacy technology as a next step for Ethereum. Um, I think that what it reflects and reading the tea leaves obviously a little bit, but I think that we can see a jury that took seriously the idea that privacy technology was important for

this like legit legitimate entity, legitimate project of Ethereum and of cryptocurrency. So, I I see a really pretty and again I'm like three inferences down the road on all on all this, but I do see some like really um some some major silver linings in in that split decision even though it can theoretically be retrieded. So, we're not off the hook on that stuff. Um yeah, >> but that like idea that you I think did have a jury where at least a few members um kind of saw the >> innocent application of this technology as legitimate. Um and you know there were defense witnesses who talked about

their usage and so the defense did present that in other ways too. Um, but I think that was um one of my most optimistic takeaways. >> And and again, you don't need to retry the facts. Like when this gets appealed, I think the big thing for that 18 USC 1960 charge is going to be whether Judge Fail back last winter when she denied the motion to dismiss got the long the law wrong. You know, and she should have dismissed that charge because that charge was inappropriate and the rule of lenity, which I talked about earlier, ambiguity should be on what is money transmission should be ruled in favor of the criminal defendant. it's wrong on the due process uh defense because obviously he got contradictory

statements from the regulator as to what money transmission was and so being convicted of unlicensed money transmission is inappropriate here from a due process standpoint and statutoily that the US criminal code that definition should be read in parody with the regulatory definition from the regulator otherwise we'll just have a nonsense interpretation of the US code so those are all legal questions and when you bring a criminal case on appeal, you can't really unless there was uh some sort of manifest issue with the way the jury did its factf finding or the way the jury did its deliberations, you can't retry the facts. But the legal questions, which were all to do with that motion to dismiss, are definitely fully ripe for denovo review. The judge at the appellet

court can say, "No, Judge Fail got the got the law wrong. So the jury found certain facts, but those were not the right facts to find to find them guilty, so we're going to overturn that charge." And I think, you know, a lot's going to be left to Brian Klein and the defense team as to exactly how to do that strategy, but I think I've laid out some of the best arguments here that I I hope and expect them to pursue. I think it's on this point that I just remain optimistic about the path forward. May and maybe it's because I'm I'm listening to you guys and we're on the bank list podcast and maybe if we inverted the world and we were having the prosecution on the bank full podcast and it this was all upside down, maybe I would be convinced in the other direction. But

Peter, I'm seeing just surface area for opportunity here for Roman Storm to appeal. And while we have certain unfortunate outcomes here, mainly the guilty on the 960 thing, there seems to be grounds for an appeal to go to to be appealed and then go our way with force and direction. Especially when we like maybe I'm going to have to tap into your legal mind here. when we reroll the dice on the court and we now have a new Department of Justice that's under the Trump administration, not the Biden administration where this court case with Roman got started in the first place. Like I I continue to be looking at this thing with a glass half full, but maybe I'm naive.

>> So there's there's a few things to be cautious about. One is that that count one which was money launder and then count count three which was sanctions evasion where the jury couldn't decide. The prosecution could decide to retry those charges because we all >> the same prosecution the same people all over again. Okay. >> All we have is a mistrial. We don't have a not-uilty verdict. So there's no double jeopardy at play here. And so that'll be one of the first things we'll find out about whether this DOJ is taking a different approach than the Biden DOJ that brought these charges originally. and we'll find that out probably in the next few uh days. The second caution is all right. So with the guilty charge, your only strategy if you're Roman is to appeal it to the to

the appellet level and challenge especially that motion to dismiss and how Judge Fail might have gotten the law wrong. A lot of that's going to come down to who they get on appeal. Like some judges there are going to take a more textual approach to the way the US code should be read. Some might be more prosecutorially friendly as to way that like prosecutors should actually have leeway to to interpret broad laws in certain ways and others will be more defendant friendly that the rule of lenity you know controls that if there's ambiguity it should be resolved in favor of the criminal defendant. So, you know, that's going to be tough and ultimately it could even get appealed up to the Supreme Court. Like the the questions of statutory interpretation, like what is the underlying law are, I think, significant enough that you could see

that going all the way up. And and I like to think that there's a lot of good textualists out there who will look at the US code and and think that interpreting these words to mean that you're doing money transmission, even if you're just publishing software, is absurd. Um, but I could see that going in different ways. Just procedurally, can we talk about like how that happens? So, there's an appeal. What's the time delay? When does that uh appellet court have to give an answer? And then it could be appealed again. Like how long, what's the duration of this thing? How long is it going to play out in the different kind of branches of of possibility here?

>> David, you might have more experience with criminal appeals. We've brought some civil suits ourselves, and I'll tell you it's on the order of months and years, but I know David, you have something to think about. Not I mean I I'm not intimately more familiar but that is definitely the scale that we're talking about. Um and um you know again makes it all the more good news that uh Roman is is going home uh this weekend >> because the prosecution could have had him in jail like if they won their argument they could have had him in jail for like years while this was playing out through appellet court. >> Yeah. And there was a motion to remand and um I I apologize. We did another show immediately before this one and I can't remember what I have and haven't talked about but um you know the fact

that um Judge Fillet in the course of denying this motion to remand did refer to the appealability and even the like I think basically her language was there are many options to appeal this conviction. Um and uh so that was that was quite um encouraging to or quite good for the defense to have the judge just acknowledge that this is something that's out there. >> And Roman's been so respectful in court. He's never missed a court a court date. Like the the idea that he'd be a flight risk when he's obviously become a public figure because of this case who's fighting for his rights like is absurd.

I think it's actually quite sad that the prosecution pushed for that, you know, immediate remand to jail. >> It seems punitive. It seems like they're just trying to twist a knife. >> That was bad form. >> Yeah. And this this gets to some hard questions that I've been struggling with here at Coin Center is, you know, President Trump comes in with with this, you know, let's make America the crypto capital of the world verbiage and I want to get on board and I believe in some of it. I've seen huge changes at the SEC, you know, which we've you guys have talked about on other episodes of this podcast and we've talked about a lot.

But then we still see in the unlicensed money transmission arena the charge that actually stuck with Roman and the jury because I think of the the bad legal reading from Judge Fail. Not as much support from the administration. So there was a a memo from Deputy Attorney General Todd Blanch uh Trump's deputy attorney general saying we're going to end regulation by prosecution. And if you ask me, this is the clearest example of regulation by prosecution because the regulator said you don't need to get a license, but then the prosecutor said you needed to get a license. You're being charged with unlicensed money transmission. So it's really a prosecutor making law by charging people with felony crimes. And so you might say, all right, well, they published

that Todd Blanch memo that said, we're going to end prosecution by regulation. There are like vagaries in that memo that allow you to read it as we're only going to stop these prosecutions in in situations where it's really just somebody who published software and had no knowledge of or involvement with any criminal uh activities. You know, and that brings us right back to this. >> If you take that to the absurd extreme, everybody who publishes software has knowledge that it could be used by criminals. Like that is the nature, especially open source software. That is the nature of open source software. And so there was a a way to read that memo from Deputy Attorney General Blanch that the that the prosecutors in the Southern District of New York seized upon. They

dropped one of the two unlicensed money transmission charges. They they they they said they're not going to bring one of the two charges to trial. And that was the one where they said you've failed to register as a money transmitter. And the only one they brought was you are a money transmitter and you knowingly transmitted criminal funds. And so, you know, there's a way to read that as, oh, we see we're sticking to the to the to the, you know, the the guidance from the the deputy attorney general memo because this one involves knowingly transmitting criminal funds. But again, they weren't transmitting. And so, you know, that that charge should have been thrown out from the beginning. and that knowledge standard is inappropriate in this context because if we're going to apply a low-level knowledge standard that your

code could be used for bad things, everyone's going to still be potentially on the hook for regulation by prosecution. So, I would have loved to have seen another memo from Trump's Department of Justice and I hope on appeal we can get some statement, some guidance that like this is the way the law should be. I hope that the administration defends the Fininsen 2019 guidance and says that's actually the standard we think is the correct standard. And the last thing I'll say on this is so Coin Center is supporting Michael Llewellyn. He's a software developer who lives in Fort Worth, Texas. He developed a protocol called Ferros that is a like GoFundMe type crowdfunding protocol but non-custodial.

It's all done on chain and it uses privacy pools uh type technology to keep donors anonymous when they're giving to good causes and they want to fund them. >> Coin Center wants to use this tech because we're a nonprofit and we want to raise money this way. Michael is suing the Department of Justice in Fort Worth, Texas for declarative judgment saying >> I see what you're doing against Roman Storm. I'm publishing software that's very similar. I'm going to maintain a front end too very much similar to the way the Tornado Cache protocol worked. I'm not going to publish this stuff until you give me declarative judgment that I'm not going to be your next target for unlicensed money transmission prosecutions.

And what's interesting is we supported Michael when he first brought that case uh right at the end of the Biden administration. So the original defendant was uh Ag Garland and then the defendant changes to Ag Bondi and even with Ag Bondi as the defendant, the defense in that case >> filed for a motion to dismiss saying Michael faces no credible threat of enforcement. >> Yeah. >> Meanwhile, Bondi's DOJ is continuing its prosecution of Roman Storm. And if I could offer a slightly downbeat extend extension of of these observations, I think that um one way to read this that tends to be mine is that you know the Trump administration, Trump DOJ and whatever conjunction they are they

exist, you know, they're making these noises that um a certain segment of their base of support that's in the crypto world sort of has a general sense of what what's being discussed and a general sense of maybe the vague goals. But when the rubber actually hits the road and you're looking at something like tornado cash, I think probably a lot of those same people might recoil at the implications of what at a very high level their political leaders are promising them. Um and and I think that that's also reflected in unfortunately, you know, I I'm I felt I would luckily we had a very generous supporter who was able to send me to do this work, but you know, the media model is not what it used to be and the coverage and

attention on this trial has been I think minuscule relative to its potential impact and its implications. Um, and so I think that it it is kind of just this unfortunate and uncomfortable gap both between political rhetoric and legal reality and between frankly the public's sort of signaling of enthusiasm for certain ideas versus actual commitment to following the legal process, paying attention to people who are in jeopardy um, in connection with these things and and taking action to influence those things. It's just there there are certain things that are fun to say and a lot of hard work to really pay attention to.

>> Okay. But going into that, so what would be the ideal uh thing that you'd like to see the Trump administration do? So Peter, you mentioned the DOJ publishing a memo, right? So let's say they publish a memo. >> Does that like call off the dogs in the in the appeal or is it just >> if we if if we pause and rewind? >> Yeah. Like the Trump administration pressured the Southern District of New York to drop the charges against Eric Adams, the mayor of New York City, >> right? >> And they did, >> right? >> And so ideally they would have just dropped these charges at least the unlicensed money transmission charge because you know >> and they haven't. So in not doing that that's a decision >> that that was a decision point that that >> it was a decision. But I should say that

I I my interpretation or you know my inference I doubt anybody in a position of real influence in the Trump administration is actually act like in the White House is even actively paying attention to this. Um I I think that like the DOJ has its own process and you know obviously there are um people there paying attention to it but in terms of like you know Pam Bondi her even herself probably doesn't know this is happening. >> I mean I'm not so sure. I think I think I think there are plenty of people in in Treasury and in DOJ who are aware of the tension between national security and privacy here and that tornado cash has become a lightning rod sort of test case for those questions and I think I think

possibly because of fear of bending too far in the privacy direction and away from the national security direction listening to people who've been you know involved in these battles for a long time. I'm not gonna like sort of like deep state type stuff like you know I'm not I'm I'm not so sure. I think I think that it may not >> I suppose what I'm saying is that the political cadres the the the public faces the not so deep state um have not chosen to intervene because I don't know about their level of awareness.

Obviously I think that what you're saying is absolutely true. >> Yeah. I mean, you look at the president's working group report which came out last week actually on crypto and this is this was like the end document for the mission that they were set on at the beginning of the administration to make America the crypto capital of the world. Um there is a section in there that says uh Congress should pass the Blockchain Regulatory Certainty Act. The Blockchain Regulatory Certainty Act addresses exactly the charge that Roman is convicted of in in in trial today. It says that if you are a non-controlling blockchain developer, you are not engaged in money transmission and should not be liable for unlicensed money transmission

prosecution. And so >> that's great. >> Yeah, it's great. And it's in the PWG report and for that we are grateful and thankful. Um but they're kind of they're pushing it off to Congress to to pass that law to offer that clarity to to rein DOJ in. Um, and now I should be charitable. There is historically a sort of wall of separation between the political powers and the DOJ for the very reason that the DOJ is also there potentially to investigate and and charge the president, right? And so the DOJ guards its independence. The Southern District of New York as a subdivision of the federal DOJ, it it sees itself, perhaps rightly so,

as a as a very autonomous body. So maybe it there just wasn't the political will to to give firm pressure on these charges. Um but but this is where we are now. And so so yes, the president's working group on digital assets is calling for Congress >> to fix the unlicensed money transmission issue. They don't identify tornado cash by name, but they're calling for that fix. And that that is massive. Like if we think about where we were a year ago, I I've gotten greedy and crazy. I'm like, that's that's amazing, you know.

So, >> yeah. I mean, but ideally, we'd have the truth social post about this case, right? I mean, that would be the ideal scenario and there would be some focus on it, some attention. >> I mean, I I'll say it right here that that tweet that Eleanor Terret um put out with Roman's statement where he said that the 1960 charge is The next thing that Roman says in that tweet is, you know, like Trump says, fight. I think it's a not so nuttle not so subtle nod to the guy that can potentially pardon him or at least apply some pressure here and uh that'll be interesting. I mean >> I wouldn't rule it out.

>> Let's talk about where we are now though because we're in this gray like gray zone area. It's not a great spot to be for open source software developers for non-custodial DeFi projects. Let's put privacy aside. All right, it's like so privacy is a thing and there's national security concerns and it's a thing, right? We you know we can understand some you know part of the government at least thinks so but this has sweeping ramifications for all non-custodial DeFi projects out there and there let's let's remember this is precedent so there was a guilty charge >> and they said that um you know that tornado cash the protocol maybe the app as well maybe both pieces like fit under the money transmitter definition. So, I

mean, >> okay, so that that doesn't seem great, though, right? Like, we're are we in a bad place? >> So, I'm going to say I'll say two things. One, you're absolutely right to point out that set privacy aside. The DOJ's theory of the case in this prosecution has never relied on we're able to go after Roman for this stuff because his tool was privacy protecting. The unlicensed money transmission thing is just you were transmitting money, which he wasn't because their definition of transmitting is insanely broad, and you knowingly transmitted elicit funds.

Says nothing about whether you hid them. And so >> let's be clear that could happen to unis swap, that could happen to a that could happen to any DeFi protocol if a bad actor starts using it, sanctioned actor. So, so the the theory of the case is incredibly broad and potentially reaches effectively all DeFi developers irrespective of whether they're using zero knowledge proofs or some other cool stuff which they should be using by the way because it's good tech but even if they don't they're on the hook for prosecution here >> if they run a front end right >> well I mean >> no even even more than that >> the government's theory of what is money transmission is just extraordinarily broad and that's why again that ruling as to whether that that should stand and and feed into jury instructions

that then that happened back last winter is so problematic >> like like your home Ethereum validator. >> Yeah. >> Oh, >> what's that? >> Any anything that has any modum of surface area to a transaction on >> Oh, yeah. I mean, I can actually there was a specific exchange in the trial um I believe one of the defense witnesses um or defense with one of the defense witnesses, the defense asked him, you know, does an Ethereum node help operate tornado cash? And the answer was yes, of course.

>> Yeah. >> Yeah. And there were questions about folks that invested in Pepper, the the the company that that Roman started to build tornado cash. Frankly, if you read the law that the government is arguing is the binding law here, um the way the government's reading it, a Bitcoin core developer is a money transmitter and needs to do KYC AML on everyone who uses the Bitcoin platform. Like, wow, >> there's an absurdity here. And it's not bounded by law. It would only be bounded by prosecutorial discretion. Like, oh well, we just won't go after the ones that are, you know, and that's not how the law is supposed to work.

>> Let me take this on a Oh, sorry. Well, let me take this on a slight entertaining diversion here and hold like so speaking to the issue of the the investors. I think this is this was another one of the really wild procedural moments of the trial because um the uh the defense wanted to bring in an investor from Dragonfly Capital who actually were the primary funders of um Tornado Cash. And the investor um whose home we later found out had actually been raided as part of the investigation. He pled the fifth. He decid and I I can't recall at the moment exactly what it was that the defense was trying to elicit from this witness, but mostly I think probably to the effect that you know tornado cash was a

promising technology that we invested in because it serves an important purpose in XYZ ecosystem. But he pled the fifth um because he believed he might still be under threat of investigation himself just having been an investor in this thing. Um and his communications were also used to establish venue for the charges. Now, um the reason that this is interesting is not that he had like in his own mind some fear of this, but that in a hearing um on a a Friday when the jury was not present, um the prosecution declined to state that he was no longer a subject of the investigation. Um they used this term subject and not target and that became somewhat misunderstood um and perhaps amplified a bit. But they

actually also had this segment of the trial expuned from the transcript and then on Monday um put into the transcript that they actually had not in any way signaled that this person was still a target of the investigation. So, there was a real two-step um in terms of we're going to put it put forth just enough of a threat against this witness to make them credibly plead the fifth and not come testify for the defense, but then we're going to actually just withdraw because this is absurd because this was an investment that was made five years ago. Um, and also investing in something is like a very strange way to impute criminal intent. Um, so you know, this this just a little side note that I found interesting. Do you think that that was a 4D chess move by the prosecution or was they just making the

next logical move uh in in one move after the other? >> I mean, frankly, that's how it read in the courtroom is >> a as a 4D chess move where the the prosecution is going to suggest just enough threat against this witness to make it credible because, you know, if you can't just plead the fifth and say like, I'm pleading the fifth. You have to have a a good reason. And the judge in this case, in this moment, had the option of kind of overriding or rejecting his fifth amendment plea um and saying, "No, you don't actually face any credible threat of implicating yourself in this." And the judge ultimately declined to do that in part because the prosecution was continuing to in so many words suggest that um his

name is Tom Schmidt um from Dragonfly was potentially um at risk of being implicated in what was going on. and then pulled it back on Monday. Basically, >> that's like so the bounds of this are even broader than what you're saying. You Peter, you said it was boundless, right? It's like we're talking about you running a node, being like a developer. This is an investor. Are you an ETH holder? Like, what the hell? >> Yeah. Remember that it's not just an unlicensed money transmission charge with an incredibly broad theory of what transmission is. It's conspiracy to do unlicensed money transmission, which means you just need to agree with one other person to commit the target offense and take one credible step towards commission of the offense like invest in a protocol.

>> Okay. But this is why I don't actually have any fear about this because of the level of absurdity that it that is. It's like, yeah, it's the whole they're trying to take down the whole entire system. And so, at some point, like, I don't care about the outcome here because it's absurd. And the level of absurdity is actually giving me a sense of like solace. >> I mean, a couple years ago, I'd say, "Yeah, it's absurd, but like watch how many devs end up going to jail." Right? We're lucky that it seems like politicians on the Hill, um the president, and this isn't just partisan, it's it's on both sides, like are finally getting that. Like, what are we getting for this villainization of

developers? Like, what's the bang for buck here? Like, who who are my voters who are like, "Yeah, go after those crypto devs." Like, >> what? And so and so I I think the winds have changed, but there was a time a couple years ago, right? Um David, >> but but now now we're today, right? And Roman feels pretty I'm guessing like as he said, ready to appeal to overturn this to to reoll the dice and he feel good about he >> here's the thing, right? It's like while we're while we're still open here to this like boundless prosecution, it just depends who's in power, right? It's like we we would have thought it was BS, but we got Shane Goplin, the founder of Poly Market, FBI busted in his house.

>> All these raids happened Jesse from Kraken. How absurd is that? Roman Storm, all of these things. Next, is it going to be Hayden Adams from >> a lot of a lot of that happened before the change of administration? >> Exactly. >> It seemed to cool off after and maybe we're just still suffering the hangover of it. And this is a guilty verdict. So to go back to your earlier question Ryan about precedent, it only has persuasive precedent. Um so this is just one verdict in one case in the southern district of New York. And so >> similar cases in other districts in other circuits of US federal court system can look at it and think yeah there are some good points or they can

disagree with it. And even in this other district of New York another judge with another case can try certain things differently. When we get up to the appeal, which will be so important, and it's why I'm super glad Roman is so gung-ho and like fight about this, then we start getting into the world of like now we're talking about binding law for first the second circuit where the Southern District of New York is, and then later if it goes up to the Supreme Court, which then we're talking about binding law and what transmission is, it's still very bad. And this goes back to my earlier point about Michael Llewellyn, the software developer whose challenge in Fort Worth were uh supporting. Like, yeah, it's bad. He faces a credible threat of enforcement.

Even if it's just the Southern District of New York that's gone crazy like this, they claim jurisdiction over anyone whose software they can run on a server in the Southern District of New York. So, like Michael lives in Fort Worth, Texas. He's seeking declarative judgment from a court that hopefully will be more skeptical of administrative overreach and the powers of tyrannical governments. But he could easily get dragged into the Southern District of New York if he doesn't get declarative judgment in Texas if they just install Feros, the privacy preserving client he's building uh for fundraising and then decide to go bully him like they've bullied the Tornado Cache developers and the Samurai Wallet developers, which we haven't talked about a lot, who got pushed into a guilty plea last week right in advance of this verdict, which

is kind of interesting. I think >> there was probably a moment to apply pressure. And these guys are sharks. They're not bad at their job. They're just, I think, on the wrong side of the legal issue here. >> So, as we close this out, maybe let's talk about the more optimistic scenario. So, is there still, as you know, David was you glass half full. Um, it seems like we can still win in a big way and crypto can win in a big way. So let's talk about if this goes to pellet court gets tried again uh is there a possibility here and what would the scenario look like where we actually win >> and have some precedent that non-custodial >> open-source software developers are not like do not apply here for this type of

moneyaundering you know legality >> three three paths to an optimistic outcome one Roman appeals the second circuit court of appeal His lawyers argue among other things that the rule of lenity controls and therefore the ambiguous um divergent interpretations of what transmission is between Fininsen's regulatory definition and the criminal code get resolved in favor of the defendant whose liberty is on the line. Hence the rule of lenity. Now effectively Fininsson's understanding of transmission which is you accept and you transmit which means you have control at some point is the law of the land.

>> Okay. >> Uh at least in the second circuit. Um and then Roman gets out. That's the end of that. Path two. Michael Llewellyn in Fort Worth, Texas. He's right now fighting off this motion to dismiss because the DOJ is saying you don't face a credible threat of enforcement. I think that's nonsense because his course of conduct's very similar to the publishing the software and the technology that Roman did and maintaining a front end as well. So maybe the court in Fort Worth uh denies the motion to dismiss that the government's pushing for and instead rules that the he gets declarative judgment that the law the statutory law of the bank secrecy act and the criminal code 18 USC1960 should be interpreted such that this is not transmission and

he's not you know on the hook for a potential unlicensed uh prosecution that could get appealed up to the appellet level. The government might challenge it, they might not. Then that kind of depends on how broadly presidential it is for the rest of the country. The third and perhaps cleanest and quickest option unfortunately this I'm realizing what I'm saying that Congress is the quickest option. That also tells you how different things are from a few years ago though is the blockchain regulatory certainty act which defines a whole category of persons as non-controlling blockchain developers and service providers. And so it's not just open source software publishers. It's like people running nodes. It's people who, you know, are operating frontends as long as they're non-custodial. These

people are not money transmitters and are not engaged in money transmission and should not face liability for unlicensed money transmission prosecution. If Congress passes that, forwardlooking, you know, it's it's too late for Romans, too late for the samurai developers, but forward-looking, we're set. Now, that law has already been attached to Clarity, which is the big market structure legislation that Congress is pushing and the president wants them to deliver. >> Oh, wow. >> It's passed the House with a overwhelming bipartisan majority. Um, which I'm like still kind of in shock about, but so happy that we managed to convince enough members of Congress that this is an important issue. And now it's headed to the Senate. The Senate has to create its market structure package.

They don't really like to be bullied by the House, so they've got to do their own thing, and that's fair. But the Senate discussion draft already has this Blockchain Regulatory Certainty Act language in it. So, that's the starting point of negotiations. We just need to hold on. Oh god, I'm going to make a hodal joke. And then >> and then and then pass it in the Senate. Um, which will happen over the next few months if it happens by the end of the year. And so there will be a key moment where we need to call our senators and say like, "This matters to me." Roman's prosecution was like horrendous and I want to develop stuff like that cuz it's good for people's privacy. If we pass the Senate, the president has already said, Trump has already said he's going to sign it. He wants the BRCA in there.

Then we fix this and >> wow. And that would be hardcoded. >> That'd be hard Yeah. hardcoded in so far as it would take another act of Congress to change the law. Whereas, you know, the regulator, which is Treasury, you know, if we've talked about Fininsson as the good guy here for a long time because their guidance was based on total independent control. It's just guidance. >> A hostile future Fininsen either in this administration if they completely change their mind on things or in the next administration, they could write new guidance and say, "No, actually, money transmission includes all these sorts of things." You know, they could they'd be hemmed in a little bit by the statutory definition of money transmission. Um, but that statuto definition is, you know, unfortunately capable of being read different ways. So, yeah, we'd be

in trouble. And if Congress actually just created clarity here, that would be great. Oddly, the bill that it's attached to is named clarity. So, >> we're just we want clarity through clarity. >> Well, Peter, three different possible paths. Makes me feel good. The more paths, the better. One of those paths is being taken nonetheless. The other two are are in the course, and each one of those is a gamble. But man, when you summate all of those together, I feel like maybe I'm just a guy who's feeling good today, but like when you add them all together, I feel like there's a pretty good likelihood of outcome. Like, check me on that. What do you feel?

>> And I hate to say it because Roman's in such a good mood. I'm going to say it like at least based on that tweet. Like, I hate to say it because nobody should be found guilty of an absurd crime like the regulator told you not to license and then you you're guilty of unlicensed conduct. But Roman's in a good mood. He's ready to fight. So, I'm going to say it. Roman's loss is a good way, I think, to galvanize support um to convince folks in the Senate that this is this is actually something that matters. The BRCA needs to pass. And I think it's also a good way to convince the district court in Fort Worth, Texas, that Michael Llewellyn faces a credible risk of prosecution because look, somebody was just found guilty. And so, Roman's taken one for the team in in in

a way by by pushing those other initiatives forward with what just happened. >> Yeah. What I'm seeing here is uh an opportunity to really slingshot us forward into a much better equilibrium. Some some things have to go right, but they don't seem that crazy. I think we've been stacked up against crazier odds in the past. David, we are technically at the end of this one court case. It actually now feels like we somehow ended in the middle of a game. Now we just jumped backwards into inning four or five. Uh what are you looking at in the short term? what is left to come out. Uh we're looking at the prosecution to see if they are going to just try and do this all over again. What What are

you looking at in the short term? In the next few days, >> um well, in in the very short term, I'm looking at a nap, but um in the in the next week, >> a well-deserved one, I will say, >> in the next week or so, we will get motions from both sides. Um, I I'm not sure and maybe I mean maybe Peter will know better than I, but I'm not sure we'll actually get, you know, any decision on whether they're going to refile those charges for a little bit longer. I don't think I don't I don't feel like we're going to get like a recharging in a week. I think that's probably a longer process, but um, you know, we will get an appeal notice. Um, we won't get details of the appeal for a little while longer. Um but we will hear relatively soon about appeals inde I

mean I mean we already know the intention to appeal um so that's not really going to u make much difference but um there there might be some follow-up um motions from from both sides that will give us something. So I guess maybe my answer is that we actually don't have a lot of new clarity coming our way immediately. Um, but maybe Peter has more insight into the the refiling part of the process in particular, >> but I guess criminal too, so it's not your special. >> Yeah. And I think a lot's going to come down to some hard choices at the Southern District of New York. And I hope that we'll have another moment for the Trump administration to apply some pressure there. I think one thing I just saw was um that apparently Jay Clayton, who was former SEC, you might remember

the name um and is acting US attorney for the Southern District of New York, said in praising the prosecution, "The speed, efficiency, and functionality of stable coins and other digital assets offer great promise, but that promise cannot be an excuse for criminality," adding that criminals committing age-old crimes like money laundering undermine the many innovators who operate lawfully. So Trump's appointee to the Southern District of New York right now is praising the prosecution and also maybe this is a misquote, but seems to be confusing the moneyaundering charge with the unlicensed money transmission charge. So that's not a great sign. Um, but at the same time, he's acting US attorney for that

district, so he's not going to criticize his own prosecutions. My hope is that they just sort of like take their win and don't refile those other two charges. I think that's probably more likely. >> Um, and my hope is that the appeal goes forward. And >> yeah. >> Yeah. And and I will say this is the way in which in some senses the hung jury could be a bad outcome for the the broader environment because if they don't refile these charges, then there is not a chance to set a precedent in the negative. there is not a chance for somebody to be found not guilty in this kind of situation. Um which does you know again have like that presidential at least some sort of uh exemplary power

going forward. And so on on some level obviously the the legislative solution that Peter is talking about closes a lot of these ambiguities going forward. But at the same time, um, I guess ideally we would have had a not-uilty verdict that would have, you know, basically made some kind of statement about the relationship between a developer's intentions and the uses to which a tool is put. Um, and currently we we don't have whatever would have been taken away from that. Um and and if we don't get a refiling of those charges, it you know, again, leaving aside the legislative issues, um it it might wait for somebody else to fall into this trap and have to

do all of this all over again. >> Yeah, I I see that perspective, David. I also do see the perspective that Roman Storm is flying home, a free man, tomorrow to see his daughter. And while that's not a legal precedent, that is what is truly happening. Uh and so call it call it soft precedent. And so I do appreciate that fact. And yeah, we as an industry, we live to fight another day uh to do this all over again. And and like Peter said, I think we all feel a little bit more galvanized. There are multiple paths towards the the happy outcome here. Uh and you know, we got there from a variety of different efforts. David, your reporting every single day in and out was just incredibly valuable. Thank you. Thank

you, David. Peter, your support from Coin Center and then also Roman Storm uh himself. Uh like I alluded to uh a second ago, we we thought we were at the ninth inning and we finished a game, but we actually just got teleported back to to ending four. And so now we're going to have to do this all over again. Roman is going, it sounds like potentially going to be appealing this so we can seal this and get a final sealed victory for Roman and for the industry, which will take more money. Uh and uh you know, and and David, what you're doing at the Rage uh was has been incredibly valuable. Uh, I would like to tell all the listeners that the bank list sent you $5,000 yesterday just as a donation uh to what you're doing so you can continue doing it. Uh, if Roman goes on

the offensive with an appeal is what I'll call it, uh, I hope that you can resume some of the coverage which will take even more money to to keep supporting you. You have a donation page, um, the rage.co/donate. We will put that link in the show notes so any listener who has been consuming some of the Rages content uh can just support some of your work there. >> And and if I can just put in a little bit more nuance there, you know, Lola Leadeds is the founder of The Rage and she and I have been, you know, working together a bit more over the last year. Um it has really been a productive relationship and we're basically poised to start thinking about how we're going to expand and make this more sustainable. Um, and so, you know, donations right now are essentially, you know, I would say a bridge towards a

future where this operation becomes more self- sustaining and we begin we're able to, you know, fund this kind of coverage um on an ongoing basis. So, uh, it it it means a lot obviously. We really appreciate you guys support. >> Yeah, of course. And then on Peter Peter side of things, you guys are doing the Coin Center dinner in New York in September. I will be in attendance. I bought a ticket. I'm looking forward to it. That is one way to support Coin Center, but I believe you guys also have coinsenter.eth as well. >> Yep. We we have the Coinenter.eth address. Um you can find our donate page on coinscenter.org. On that page, you'll you'll find a fun little like radio choice between how would you like to donate anonymously or dox myself but get

a free thank you gift, which is like a t-shirt, a Bitcoin t-shirt. >> Um I actually would encourage people to give anonymously. Um, and David, >> it's legal, right? Are we okay to do that? >> No, it's it's it's legal. In fact, in America, in America, you have a first amendment right to associate with other people anonymously. >> Okay? >> And so, your donation to Coin Center is your way of expressing that associational right. The government doesn't have any business knowing precisely who all our donors are because that's exactly how they target suspect political organizations that they want to quash.

>> So, donate anonymously. It's also good practice for the listener just to engage in privacy technology. >> There's there's another benefit too, and David, you know this because you were our co-plaintiff in the lawsuit challenging the tornado cash sanctions because we received donations using tornado cash. We had standing to challenge the sanctioning of the tornado contracts because we're like, no, we we want to keep using tornado cash to receive donations. And by the way, that's a first amendment associational right. So give to us using some weird Ethereum based privacy tool and then we'll we'll have standing to defend that tool if they ever come forward in the future >> to defend that tool and normalize that tool so privacy can be normalized in society as much as possible. Peter

David, thank you guys for coming on and just doing the Lord's work uh just defending Roman reporting on privacy in America uh and making sure we have the freedom to to use these bankless tools. >> Thanks guys. It's been great. >> Thank you all for having us on. Thank you. >> Bank Nation, you guys know the deal. Crypto is risky. Somebody might try and take you to court. We don't want that. But we got people like Coin Center. We got people like David on our side, which makes me feel very good. Nonetheless, you can lose what you put in. We are head west. It's not for everyone, but we are glad you are with us on the bankless journey. Thanks a lot.