Jury Convicts Tornado Cash Developer on Unlicensed Money Transmission Charge

A Manhattan federal jury has convicted Roman Storm, a developer of the Ethereum-based cryptocurrency mixer Tornado Cash, of conspiring to operate an unlicensed money transmitting business under federal law. The verdict, announced recently, marked a partial win for prosecutors, as the jury deadlocked on the money laundering conspiracy charge and acquitted Storm of sanctions violations under the International Emergency Economic Powers Act (IEEPA) [1].

The prosecution had argued that Storm played a central role in enabling illicit actors to launder over $1 billion worth of cryptocurrency through Tornado Cash, with particular emphasis on its use by the North Korea-linked Lazarus Group. However, the jury did not reach a consensus on the laundering charge, while the acquittal on sanctions evasion suggests that the evidence linking Storm to violations of U.S. economic sanctions did not meet the legal threshold [1].

Amanda Tuminelli, executive director of the DeFi Education Fund, criticized the prosecution’s approach to the charges on which the jury could not agree, calling the underlying legal theory “inaccurate, dangerous, and limitless.” She emphasized that holding software developers accountable for how third parties use their open-source code could have broad and potentially chilling effects on the decentralized finance (DeFi) ecosystem [1].

Following the verdict, prosecutors sought to have Storm detained, citing concerns over potential flight risk due to his access to substantial cryptocurrency assets and alleged connections to co-defendant Roman Semenov, who remains at large. Storm’s defense, however, argued that he had met all bail conditions, surrendered his passport, and is subject to a home-secured bond. Judge Katherine Polk Failla denied the detention request, noting that Storm is only guilty on one charge and has strong incentives to remain in the U.S. to continue his legal defense [1].

Storm reportedly left the courtroom shortly after the verdict and expressed satisfaction with the outcome, calling the unlicensed money transmission charge “bullshit.” He has indicated that he plans to appeal the conviction and continue fighting the charges, particularly due to his personal stake in the case, including the presence of his young daughter [1].

With the jury unable to decide on the laundering charge, prosecutors are expected to seek a retrial on those counts. The legal battle, which has drawn significant attention in the crypto and DeFi sectors, raises broader questions about the application of traditional financial regulations to decentralized technologies and the extent to which developers can be held legally accountable for the misuse of their tools by others [1].

The case, which began in 2023, is among the first high-profile prosecutions targeting individuals behind open-source DeFi tools used for illicit activities. Its outcome could influence future legal strategies in the space and may serve as a precedent in other cases involving cryptocurrency infrastructure and regulatory enforcement.

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[1] https://cryptoslate.com/jury-convicts-roman-storm-on-unlicensed-money-transmission-hung-on-laundering-not-guilty-on-sanctions/