Since President Donald Trump’s crypto-fueled return to office, the American digital assets industry has lost most of its favorite villains, and many of its most revered martyrs.
But in the United States, at least one victim of the federal government’s so-called “war on crypto” remains: Roman Storm, co-founder of the popular coin mixing service Tornado Cash, who is set to go on trial Monday in New York for criminal conspiracy to commit money laundering and evading U.S. sanctions.
And the man now leading the charge in that prosecution? None other than Jay Clayton, the onetime crypto villain, turned hero, turned villain again, who previously served as SEC chair during the first Trump administration.
While the vast majority of the crypto industry’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 some of the financial regulator’s most notable lawsuits against the industry.
In late 2020, for instance, Clayton—in one of his final acts as SEC chair—presided over a $1.3 billion suit against industry giant Ripple. The suit alleged Ripple illegally offered unregistered securities when selling XRP, a token developed by the company’s founders. Most of the Gensler SEC’s later cases against leading crypto token issuers and exchanges would mirror the claims made in the Ripple suit—which still has yet to officially resolve.
In his tenure leading the SEC, Clayton brought 57 cases against crypto firms, ICOs, and other blockchain-based projects, a statistic the attorney proudly touted on his way out of the agency in 2021.
After leaving government, Clayton returned to practicing law at the white-shoe New York firm Sullivan & Cromwell. He also, interestingly, joined the advisory board of Fireblocks, a crypto custody provider.
In April, Clayton re-entered the government fold, when President Trump appointed him interim U.S. Attorney for the Southern District of New York—a key post overseeing some of the Department of Justice’s most high profile criminal prosecutions, including those of Sean “Diddy” Combs, Luigi Mangione, and once upon a time, FTX founder Sam Bankman-Fried.
That list of defendants also includes Tornado Cash’s Storm, whom the Trump administration has continued to pursue charges against, despite the Treasury Department dropping its case against Tornado Cash earlier this week, and the Department of Justice pledging in April to back off intermediary services offering similar privacy-focused “coin mixing” services.
While crypto leaders have been hesitant to publicly critique any element of the second Trump administration, given the numerous gifts it has so far handed the industry, DeFi and privacy advocates have expressed worry that a successful prosecution of Storm for creating an automated website offering users privacy protections for their crypto transactions could set a harmful precedent for targeting software developers, and even risk destroying the American DeFi industry.
DeFi refers to a subset of crypto applications, arguably the heart of the industry, that enables the permissionless and non-custodial trading of digital assets. Before hitting a major exchange like Coinbase, just about every notable crypto asset these days trades initially on a DeFi application run on a native blockchain network.
Storm himself recently framed the potential of his upcoming trial on that ecosystem quite starkly: “If I lose, DeFi dies with me.”
And yet, under Clayton’s leadership, the Trump DOJ’s SDNY office has pushed ahead with its case against the software developer. Clayton’s name has graced the cover of many pre-trial motions filed by the Department of Justice in Storm’s case, which have in some cases successfully prevented certain pro-crypto legal precedents from being discussed at trial.
A source familiar with the SDNY’s operations told Decrypt, however, that motions filed by the office’s prosecutors are generally signed by the U.S. Attorney—who oversees all cases in the district, but does not handle matters of day-to-day litigation.
Storm’s trial is set to begin on Monday, in lower Manhattan. The trial will be a crypto reunion in more ways than one: The case’s judge, Katherine Failla, previously oversaw the SEC’s intense, yearslong lawsuit against Coinbase, which was dismissed by the Trump administration in February.
