The SEC Chair Who Sued Ripple Is Now Prosecuting Roman Storm

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

However in the USA, not less than one sufferer of the federal authorities’s so-called “conflict 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 prison conspiracy to commit cash laundering and evading U.S. sanctions. 

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

Whereas the overwhelming majority of the crypto trade’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 among the monetary regulator’s most notable lawsuits towards the trade. 



In late 2020, as an example, Clayton—in considered one of his ultimate acts as SEC chair—presided over a $1.3 billion swimsuit towards trade large Ripple. The swimsuit alleged Ripple illegally supplied unregistered securities when promoting XRP, a token developed by the corporate’s founders. Many of the Gensler SEC’s later instances towards main crypto token issuers and exchanges would mirror the claims made within the Ripple swimsuit—which nonetheless has but to formally resolve.

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

After leaving authorities, Clayton returned to practising regulation 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. Legal professional for the Southern District of New York—a key publish overseeing among the Division of Justice’s most excessive profile prison prosecutions, together with these of Sean “Diddy” Combs, Luigi Mangione, and as soon as upon a time, FTX founder Sam Bankman-Fried.

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

Whereas crypto leaders have been hesitant to publicly critique any ingredient of the second Trump administration, given the quite a few presents it has to date handed the trade, 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 may set a dangerous precedent for concentrating on software program builders, and even danger destroying the American DeFi trade. 

DeFi refers to a subset of crypto functions, arguably the guts of the trade, that allows the permissionless and non-custodial buying and selling of digital property. Earlier than hitting a significant change like Coinbase, nearly each notable crypto asset today trades initially on a DeFi utility run on a local blockchain community.

Storm himself not too long ago framed the potential of his upcoming trial on that ecosystem fairly starkly: “If I lose, DeFi dies with me.” 

And but, below Clayton’s management, the Trump DOJ’s SDNY workplace has pushed forward with its case towards the software program developer. Clayton’s title has graced the duvet 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 acquainted with the SDNY’s operations informed Decrypt, nevertheless, that motions filed by the workplace’s prosecutors are typically signed by the U.S. Legal professional—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 will likely be a crypto reunion in additional methods than one: The case’s decide, Katherine Failla, beforehand oversaw the SEC’s intense, yearslong lawsuit towards Coinbase, which was dismissed by the Trump administration in February.