Ethereum News Today: Tornado Cash Co-Founder Convicted of Unlicensed Money Transmission in U.S. Court

Roman Storm, co-founder and developer of the cryptocurrency privacy tool Tornado Cash, was convicted on August 6, 2025, of conspiracy to operate an unlicensed money transmitting business in a U.S. federal court in Manhattan [1]. The conviction was among three charges brought against him, with the jury deadlocked on the remaining counts of conspiracy to commit money laundering and conspiracy to violate North Korea sanctions [1]. The ruling, following four days of deliberation, means Storm could face up to five years in prison, though a sentencing date has yet to be set [1].

The prosecution’s case focused on the claim that Storm had the technical capability to implement safeguards to prevent Tornado Cash from being exploited by cybercriminals but chose not to do so [1]. They alleged that Storm’s tool enabled hackers—including North Korea’s Lazarus Group—to launder over $1 billion in stolen funds [1]. The government argued that despite the decentralized nature of the platform, Storm had a role in its operation and should be held accountable for its misuse [1].

Storm’s defense team countered by emphasizing the technical and legal complexities of decentralized software. They brought in experts such as Ethereum core developer Preston Van Loon and NAXO co-founder Matthew Edman to explain how privacy tools function outside centralized control [1]. The defense also stressed the lack of direct oversight in decentralized systems, arguing that the distinction between custodial and non-custodial technologies should have precluded a conviction [1].

Alex Urbelis, general counsel for the Ethereum Name Service, noted that the verdict was a “mixed bag for crypto,” with the hung jury indicating skepticism about the more serious charges [1]. However, he criticized the conviction on unlicensed money transmission as legally problematic, stating that the jury may not have fully grasped the nuances of decentralized systems [1].

Storm, who remains free on bail, has been supported by major figures in the crypto space, including Ethereum co-founder Vitalik Buterin and the Ethereum Foundation, who contributed over $3 million to his legal defense fund [1]. His attorney, Brian Klein, expressed relief that the jury did not convict him on the more serious charges but emphasized that the remaining conviction is legally flawed and that Storm will continue to fight the case [1].

The case has raised broader concerns about the legal risks faced by crypto developers, particularly those working on privacy-enhancing technologies. The conviction could set a precedent for how the U.S. government prosecutes the creators of decentralized financial tools, regardless of whether they directly control or profit from user activities [1].

Prosecutors have not yet decided whether to retry Storm on the two charges that led to a deadlocked jury. Meanwhile, Storm’s legal team continues to prepare for sentencing, confident in the strength of their arguments and the support of the broader crypto community [1].

The verdict follows a similar case in which the developers of Samourai Wallet pleaded guilty to unlicensed money transmission while securing a deal to drop more severe charges [1]. This pattern highlights the growing regulatory scrutiny of privacy-focused crypto tools and the challenges developers face in navigating a legal landscape still grappling with the implications of decentralization [1].

[1] Source: Tornado Cash Developer Convicted of Operating Unlicensed Money Service (https://blockonomi.com/tornado-cash-developer-convicted-of-operating-unlicensed-money-service/)