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Jake Chervinsky: Judge instructed jury incorrectly on Section 1960, leading to misunderstanding of non-custodial software developers.
ByAinvest
Friday, Aug 8, 2025 2:36 pm ET1min read
Jake Chervinsky: Judge instructed jury incorrectly on Section 1960, leading to misunderstanding of non-custodial software developers.
A Manhattan jury found Tornado Cash co-founder Roman Storm guilty of conspiring to run an unlicensed money transmitter, but deadlocked on charges related to money laundering and sanctions evasion. The verdict, handed down on Wednesday, has sparked debate over the legal implications for developers of privacy-focused software.Judge Katherine Failla instructed the jury to consider Section 1960 of the US Code, which pertains to unlicensed money transmitters. However, legal experts argue that the judge's instruction was misleading, particularly in the context of non-custodial software developers like Storm. Crypto lawyer Jake Chervinsky criticized the instruction, stating that Section 1960 should not apply to developers of non-custodial protocols who lack control over user funds [3].
Storm was convicted of conspiring to operate an unlicensed money transmitter, which carries a maximum sentence of up to five years in prison. The jury remained deadlocked on the charges of money laundering and sanctions evasion, which carry potential sentences of up to 20 years and 10 years respectively [1].
The case highlights the legal gray area surrounding privacy-focused software and the potential for developers to face severe penalties. The Ethereum Foundation has pledged to match up to $500,000 in donations for Storm's legal defense, emphasizing the importance of the case for developers worldwide [1].
In a related development, the founders of Bitcoin mixer Samourai Wallet pleaded guilty to similar charges, facing up to five years in prison for allegedly laundering over $100 million [1]. Their sentencing is scheduled for November 6.
The case underscores the need for clear legal guidelines for developers of privacy-focused software, as well as the potential consequences of misinterpreting existing laws. As the crypto industry continues to evolve, these legal considerations will remain a critical area of focus for investors and financial professionals alike.
References:
[1] https://decrypt.co/334190/ethereum-foundation-pledges-match-500k-roman-storms-legal-defense
[2] https://www.newsbytesapp.com/news/world/us-charges-chinese-nationals-for-illegal-nvidia-ai-chip-shipments/story
[3] https://cointelegraph.com/news/tornado-cash-roman-storm-found-guilty-partial-verdict?utm_campaign=rss_partner_inbound&utm_medium=rss&utm_source=rss_feed
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