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  • Tornado Cash Creator’s Attorneys Say Prosecutors Hid Evidence

Tornado Cash Creator’s Attorneys Say Prosecutors Hid Evidence

Plus, 👮 Russian crypto exec arrested, 🛡️ Binance and Kraken foil insider attacks, 📈 BTC transaction fees skyrocket.

Author

Juan Aranovich
May 19, 2025

Hi! In today’s edition:

  • 🧑‍⚖️ Tornado Cash calls cover-up

  • 🕵️‍♂️ Russia arrests crypto exec 

  • 🔒 Binance, Kraken fend off attacks

  • 🚀 Bitcoin fees soar

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By Tikta

Attorneys for Roman Storm, one of the creators of Tornado Cash, have filed a motion alleging that U.S. prosecutors withheld exculpatory evidence during his trial.

The evidence in question centers on prosecutors’ communications with the Financial Crimes Enforcement Network (FinCEN) in 2023 that his lawyers argue are critical to the charges against Storm.

The lawyers claimed that a phone call between senior FinCEN officials and government prosecutors had suggested that non-custodial crypto mixers such as Tornado Cash did not meet the legal definition of money-transmitting businesses, a key point in the prosecutors’ case.

Defense attorneys for Samourai Wallet developers Keonne Rodriguez and William Lonergan Hill have made similar claims. 

The outcome of the dispute could have significant implications for how non-custodial crypto mixers are regulated and prosecuted in the U.S.

Vladimir Smerkis, co-founder of Telegram-based crypto project Blum and former general manager of Binance in Russia, has been arrested in Moscow on suspicion of large-scale fraud.

Smerkis is being held under Article 159 of Russia’s criminal code, which covers fraud on an especially large scale and carries a potential prison sentence of 2-12 years.

Although the official charges have not been fully disclosed, Russian media reports and sources close to the investigation suggest that the case may be linked to Smerkis’s previous ventures, The Token Fund and Tokenbox. 

The projects, launched in 2017, reportedly raised millions of dollars but ultimately failed, with investors allegedly losing around $15 million.

Following his arrest, Blum announced that Smerkis had resigned from his role as chief marketing officer and was no longer involved with the project in any capacity.

Binance and Kraken, two of the world’s largest cryptocurrency exchanges, were recently targeted by sophisticated attacks similar to the one that led to a major data breach at Coinbase.

The attackers reportedly attempted to bribe customer service representatives at the exchanges, mainly by contacting them on Telegram and requesting sensitive information such as account balances and home addresses.

The style of the attack mirrored the recent breach at Coinbase, which resulted in the exposure of personal information on around 1 million users, including Sequoia Capital Managing Partner Roelof Botha.

Both Binance and Kraken managed to prevent any compromise of customer data or funds by using advanced AI-driven security monitoring that detected and flagged the suspicious activity early, preventing any employees from divulging sensitive information, according to a report by Bloomberg.

Bitcoin transaction fees have reached their highest levels this year as the original digital asset’s price surged to challenge and briefly top $106,800 on Sunday before dropping back to around $102,500 as of 3 a.m. ET on Monday.

The seven-day moving average for Bitcoin transaction fees rose to $2.40, the highest value recorded this year. Meanwhile, the average number of transactions had dropped off significantly from an April peak above 500,000 to around 330,000 as of Saturday.

Fee spikes tend to coincide with periods of heightened market activity as more people attempt to move funds on-chain. 

Bitcoin’s rally past the $104,000 mark was supported by “visible on-chain volumes,” according to Glassnode.

“The consistency between on-chain accumulation and off-chain spot demand helps establish that the rally to $104k was supported by genuine dip buying activity,” Glassnode said. “This confluence of buyer strength across both dimensions would ideally remain in play to sustain a mid-term bullish outlook.”

  • 📉 Galaxy Digital’s long-anticipated U.S. listing on the Nasdaq opened at $23.70 on Friday but fell nearly 5% on the day as the firm sought deeper capital access to fund massive data center ambitions after years of trading in Canada.

  • 🇬🇧 Starting next year, crypto firms serving UK customers must report full user and transaction records or face penalties of up to £300 ($398) per customer under the country’s adoption of the global Cryptoasset Reporting Framework.

  • 🏦 Argentinian President Javier Milei, under investigation for promoting the failed Libra token that wiped out investor funds, was on Friday subjected to an order for the central bank to unseal his and his sister’s bank records while he skipped a court-ordered civil hearing.

  • 🚓 Alabama resident Eric Council Jr. was sentenced to 14 months in prison for hacking the SEC’s X account last year to falsely announce the approval of a bitcoin exchange-traded fund, triggering a $1,000 price spike just one day before the actual January 2024 approval.

  • 📨 Trump-backed World Liberty Financial on Friday pushed back against inquiries by U.S. Senator Richard Blumenthal, the top Democrat on a panel tasked with investigating corruption and mismanagement, denying ties to Fight Fight Fight, the firm behind the TRUMP memecoin, and defending its operations as lawful and transparent in a formal letter to the Senate panel.

  • 🔄 The U.S. Commodity Futures Trading Commission will be reduced to just two commissioners after Christy Goldsmith Romero and Summer Mersinger both announced they would step down at the end of the month, leaving leadership awaiting Senate confirmations.

  • ⚙️ Alchemy expanded its multi-chain infrastructure beyond Ethereum by acquiring DexterLab, a Solana infrastructure provider used by the likes of Google and the Solana Foundation, although the terms of the deal were not disclosed.

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