Former chairman of the Securities and Exchange Commission (SEC) Jay Clayton has been charged to oversee the trial of Tornado Cash developer Roman Storm.
Despite the crypto-fueled return to office of United States President Donald Trump and his promise to the crypto industry, one character remains embroiled in the federal government’s war on crypto: the co-founder of popular crypto mixing service Tornado Cash, Roman Storm.
According to reports, Roman Storm is set to go on trial in New York on Monday for criminal conspiracy to commit money laundering and evading United States sanctions. Leading the charge to prosecute Storm is one-time crypto villain, turned sweetheart, turned villain, Jay Clayton, who served as the chairman of the SEC during the first administration of Donald Trump.
Former SEC Chair to lead the prosecution of Roman Storm
Most of the prominent figures and participants in the crypto industry in the United States have always had bad words for former SEC Chair Gary Gensler during the Biden administration, with some of them even throwing a “party” after they heard Donald Trump would be replacing him when his tenure started.
This was because he was the face of the agency when they started initiating a crackdown against crypto firms, taking some of them to court, while forcing others into settlements.
Meanwhile, what the market didn’t realize was that these crackdowns and lawsuits first started under Clayton. For instance, in one of his last acts as SEC chair in late 2020, Clayton presided over a $1.3 billion lawsuit against industry favorite Ripple.
According to Clayton, the company offered unregistered securities when it sold XRP, a token that was developed by Ripple, to its investors. While most people say Gensler was the force behind that lawsuit, owing to the fact that he was keen on making Ripple pay for what he claims they did, it was Clayton who initiated the lawsuit and passed it down to Gensler.
Most of the cases that Gensler would later handle as SEC chair followed the same line, making him one of the most hated until he left the helm of affairs at the agency. During his time with the agency, Clayton brought 57 cases against crypto firms, ICOs, and other blockchain-based projects, a statistic he talked about proudly on his way out of the agency in 2021.
After he left the agency, Clayton returned to practicing law at New York firm Sullivan & Cromwell. Interestingly, he also joined the advisory board of Fireblocks, a crypto firm that provides custody services.
Clayton returned to serve in the government in April after President Trump appointed him as the US Attorney for the Southern District of New York, a post that will oversee some of the Department of Justice’s high-profile criminal prosecutions, including that of Luigi Mangione, Sean Combs, and former FTX CEO Sam Bankman-Fried.
The list also includes Storm, whom the Trump administration has continued to pursue charges against, despite the Treasury Department dropping its case against his platform earlier this week.
Trump administration could set a precedent for DeFi
While crypto leaders have been slow to criticize the decisions taken by the Trump administration due to the numerous gifts it has handed to them, advocates have expressed worries that a successful prosecution could set a harmful precedent that will target software developers and may even destroy the American DeFi industry.
Storm was also vocal about the effects of his upcoming trial, saying, “If I lose, DeFi dies with me.”
And yet, under Clayton’s leadership, the Trump DOJ SDNY’s office is moving ahead with the case against Storm. Clayton’s name has been seen in every pre-trial motion filed by the DOJ in Storm’s case, which has seen some cases successfully prevent certain pro-crypto legal precedents from being discussed at trial.
According to a source familiar with the operations at the SDNY, motions filed by the office’s prosecutors are signed by the US Attorney who oversees cases in the district but does not handle day-to-day litigation. Storm’s trial is expected to begin on Monday in lower Manhattan. The trial will be a sort of crypto reunion as the case’s judge, Katherine Failla, previously oversaw the SEC’s years-long battle against Coinbase, which was dismissed in February by the Trump administration.
