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Crypto group asks Trump to end prosecution of crypto devs, Roman Storm

The crypto lobby group, the DeFi Education Fund, has petitioned the Trump administration to end what it claimed was the “lawless prosecution” of open-source software developers, including Roman Storm, a creator of the crypto mixing service Tornado Cash.

In an April 28 letter to White House crypto czar David Sacks, the group urged President Donald Trump “to take immediate action to discontinue the Biden-era Department of Justice’s lawless campaign to criminalize open-source software development.” 

The letter specifically mentioned the prosecution of Storm, who was charged in August 2023 with helping launder over $1 billion in crypto through Tornado Cash. His trial is still set for July, and his fellow charged co-founder, Roman Semenov, is at large and believed to be in Russia.

The DeFi Education Fund said that in Storm’s case, the Department of Justice is attempting to hold software developers criminally liable for how others use their code, which is “not only absurd in principle, but it sets a precedent that potentially chills all crypto development in the United States.”

The group also called for the recognition that the prosecution contradicts the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) guidance from Trump’s first term, which established that developers of self-custodial, peer-to-peer protocols are not money transmitters. 

Crypto group asks Trump to end prosecution of crypto devs, Roman Storm
Source: DeFi Education Fund

“This kind of legal environment does not just chill innovation — it freezes it,” they argued. The letter added that it also “empowers politically-motivated enforcement and puts every open-source developer at risk, regardless of industry.”

In January, a federal court in Texas ruled that the Treasury overstepped its authority by sanctioning Tornado Cash. 

Stakes could not be higher

The group thanked Trump for his support of the industry and his stated goal to make America the “crypto capital of the planet.” 

They added, however, that his goal can’t be realized if developers are prosecuted for building tools that enable the technology.

“We ask President Trump to protect American software developers, restore legal clarity, and end this unlawful DOJ overreach. The job’s not finished, and the stakes could not be higher.”

Related: Tornado Cash dev wants charges dropped after court said OFAC ‘overstepped’

Variant Fund chief legal officer Jake Chervinsky said the Justice Department’s case against Storm is “an outdated remnant of the Biden administration’s war on crypto.” 

“There is no justification in law or policy for prosecuting software developers for launching non-custodial smart contract protocols,” he added. 

At the time of writing, the petition had attracted 232 signatures from industry executives and developers, including Coinbase co-founder Fred Ehrsam, Paradigm co-founder Matt Huang, and Ethereum core developer Tim Beiko, among others.

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MEV bot trial ends in mistrial after jury deadlock on brothers’ verdict

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MEV bot trial ends in mistrial after jury deadlock on brothers’ verdict

A New York jury was unable to reach a verdict in the case of Anton and James Peraire-Bueno, the MIT-educated brothers accused of fraud and money laundering related to a 2023 exploit of the Ethereum blockchain that resulted in the removal of $25 million in digital assets.

In a Friday ruling, US District Judge Jessica Clarke declared a mistrial in the case after jurors failed to agree on whether to convict or acquit the brothers, Inner City Press reported.

The decision came after a three-week trial in Manhattan federal court,  resulting in differing theories from prosecutors and the defense regarding the Peraire-Buenos’ alleged actions involving maximal extractable value (MEV) bots.

A MEV attack occurs when traders or validators exploit transaction ordering on a blockchain for profit. Using automated MEV bots, they front-run or sandwich other trades by paying higher fees for priority.

In the brothers’ case, they allegedly used MEV bots to “trick” users into trades. The exploit, though planned by the two for months, reportedly took just 12 seconds to net the pair $25 million.

In closing arguments to the jury this week, prosecutors argued that the brothers “tricked” and “defrauded” users by engaging in a “bait and switch” scheme, allowing them to extract about $25 million in crypto. They cited evidence suggesting that the two plotted their moves for months and researched potential consequences of their actions. 

“Ladies and gentlemen, bait and switch is not a trading strategy,” said prosecutors on Tuesday, according to Inner City Press. “It is fraud. It is cheating. It is rigging the system. They pretended to be a legitimate MEV-Boost validator.” 

Related: MEV bot exploit heads to US court, testing crypto’s legal gray zones

In contrast, defense lawyers for the Peraire-Buenos pushed back against the US government’s theory of the two pretending to be “honest validators” to extract the funds, though the court ultimately allowed the argument to be presented to the jury.  

“This is like stealing a base in baseball,” said the defense team on Tuesday. “If there’s no fraud, there’s no conspiracy, there’s no money laundering.”