Roman Storm Sentenced for Tornado Cash's Unlicensed Money Transmission Role

The U.S. Department of Justice (DoJ) secured a conviction against Roman Storm, co-founder of the decentralized cryptocurrency mixer Tornado Cash, on charges of operating an unlicensed money-transmitting business. The verdict, delivered in late July 2025, follows a four-week trial in the Southern District of New York [1]. Storm was sentenced to five years in prison and found responsible for facilitating over $1 billion in illicit transactions, much of which originated from North Korean hackers, including $600 million from the Axie Infinity hack [2]. However, he was acquitted of more severe charges, including money laundering and sanctions violations [3].

The conviction has drawn criticism from legal experts and DeFi advocates, who argue that the case sets a dangerous precedent for decentralized finance. Jake Chervinsky, legal chief at Variant Fund, called the ruling a "sad day for DeFi," stating that the DoJ’s use of Section 1960 to charge Storm was legally inappropriate, as he did not control user funds [4]. Chervinsky emphasized that the law should not apply to non-custodial protocol developers and urged an appeal [5].

The DeFi Education Fund and Coin Center, two prominent crypto advocacy groups, echoed similar concerns, noting that the jury failed to recognize the distinction between a developer and the actions of third-party users. They argue that holding developers accountable for how users interact with open-source tools could stifle innovation in the DeFi space [6].

The case has highlighted the growing tension between innovation and regulation in the crypto industry. While Tornado Cash remains operational, the conviction of its co-founder signals a shift in how U.S. authorities are approaching decentralized technologies. The DoJ has made it clear that it will pursue legal action against individuals associated with tools that have been used for illicit activity, regardless of their original intent [7].

Supporters of DeFi stress the importance of privacy in digital finance and warn that the ruling could discourage the development of privacy-enhancing technologies. SEC Commissioner Hester Peirce has previously raised concerns about regulatory overreach in the crypto space and reiterated the need to protect user privacy while balancing law enforcement efforts [8]. As the legal landscape continues to evolve, the Tornado Cash case is expected to play a significant role in shaping future discussions on DeFi governance and financial privacy [9].

[1] AMBCrypto, Why Tornado Cash's Roman Storm verdict marks 'a sad day for DeFi' (https://ambcrypto.com/why-tornado-cashs-roman-storm-verdict-marks-a-sad-day-for-defi/)

[2] CoinCentral, Crypto Developer Roman Storm Found Guilty in Tornado Cash Case (https://coincentral.com/crypto-developer-roman-storm-found-guilty-in-tornado-cash-case/)

[3] Techmeme, A US jury finds Tornado Cash co-founder Roman Storm guilty of conspiring to run an unlicensed money-transfer operation that laundered $1B+ via Tornado Cash — A (https://www.techmeme.com/250806/p28)

[4] Ariel Givner, A sad day for DeFi. Tornado Cash dev Roman Storm has been found GUILTY of count 2 only... (https://x.com/givnerariel?lang=en)

[5] Coinpedia, SEC's Hester Peirce Defends Crypto Privacy, Slams Financial Surveillance (https://coinpedia.org/news/secs-hester-peirce-defends-crypto-privacy-slams-financial-surveillance/)

[6] FXLeaders, Daily Crypto Signals: Bitcoin Faces Dollar Headwinds... (https://www.fxleaders.com/news/2025/08/07/daily-crypto-signals-bitcoin-faces-dollar-headwinds-xrp-tests-critical-support-at-2-65/)

[7] Techmeme, Top News (https://www.techmeme.com/?full=t)