The SEC Chair Who Sued Ripple Is Now Prosecuting Roman Storm

Since President Donald Trump’s crypto-fueled return to workplace, the American digital belongings business has misplaced most of its favourite villains, and plenty of of its most revered martyrs. 

However in the USA, not less than one sufferer of the federal authorities’s so-called “warfare on crypto” stays: Roman Storm, co-founder of the favored coin mixing service Twister Money, who is ready to go on trial Monday in New York for legal conspiracy to commit cash laundering and evading U.S. sanctions. 

And the person now main the cost in that prosecution? None aside from Jay Clayton, the onetime crypto villain, turned hero, turned villain once more, who beforehand served as SEC chair in the course of the first Trump administration. 

Whereas the overwhelming majority of the crypto business’s anger at regulators was directed, for years, at Biden-era SEC chair Gary Gensler, it was Clayton who initiated the SEC crackdown on crypto and greenlit a few of the monetary regulator’s most notable lawsuits in opposition to the business. 



In late 2020, for example, Clayton—in one among his last acts as SEC chair—presided over a $1.3 billion go well with in opposition to business large Ripple. The go well with alleged Ripple illegally supplied unregistered securities when promoting XRP, a token developed by the corporate’s founders. A lot of the Gensler SEC’s later instances in opposition to main crypto token issuers and exchanges would mirror the claims made within the Ripple go well with—which nonetheless has but to formally resolve.

In his tenure main the SEC, Clayton introduced 57 instances in opposition to crypto companies, ICOs, and different blockchain-based tasks, a statistic the legal professional proudly touted on his approach out of the company in 2021. 

After leaving authorities, Clayton returned to practising legislation on the white-shoe New York agency Sullivan & Cromwell. He additionally, apparently, joined the advisory board of Fireblocks, a crypto custody supplier.

In April, Clayton re-entered the federal government fold, when President Trump appointed him interim U.S. Lawyer for the Southern District of New York—a key publish overseeing a few of the Division of Justice’s most excessive profile legal prosecutions, together with these of Sean “Diddy” Combs, Luigi Mangione, and as soon as upon a time, FTX founder Sam Bankman-Fried.

That listing of defendants additionally contains Twister Money’s Storm, whom the Trump administration has continued to pursue costs in opposition to, regardless of the Treasury Division dropping its case in opposition to Twister Money earlier this week, and the Division of Justice pledging in April to again off middleman providers providing related privacy-focused “coin mixing” providers.

Whereas crypto leaders have been hesitant to publicly critique any factor of the second Trump administration, given the quite a few presents it has to date handed the business, DeFi and privateness advocates have expressed fear {that a} profitable prosecution of Storm for creating an automatic web site providing customers privateness protections for his or her crypto transactions might set a dangerous precedent for concentrating on software program builders, and even threat destroying the American DeFi business. 

DeFi refers to a subset of crypto purposes, arguably the center of the business, that permits the permissionless and non-custodial buying and selling of digital belongings. Earlier than hitting a serious change like Coinbase, nearly each notable crypto asset as of late trades initially on a DeFi software run on a local blockchain community.

Storm himself just lately framed the potential of his upcoming trial on that ecosystem fairly starkly: “If I lose, DeFi dies with me.” 

And but, beneath Clayton’s management, the Trump DOJ’s SDNY workplace has pushed forward with its case in opposition to the software program developer. Clayton’s title has graced the quilt of many pre-trial motions filed by the Division of Justice in Storm’s case, which have in some instances efficiently prevented sure pro-crypto authorized precedents from being mentioned at trial.

A supply aware of the SDNY’s operations informed Decrypt, nonetheless, that motions filed by the workplace’s prosecutors are typically signed by the U.S. Lawyer—who oversees all instances within the district, however doesn’t deal with issues of day-to-day litigation.

Storm’s trial is ready to start on Monday, in decrease Manhattan. The trial can be a crypto reunion in additional methods than one: The case’s choose, Katherine Failla, beforehand oversaw the SEC’s intense, yearslong lawsuit in opposition to Coinbase, which was dismissed by the Trump administration in February.