Roman Storm Convicted in Tornado Cash Unlicensed Business Case

A Manhattan jury has found Roman Storm, co-founder of Tornado Cash, guilty of conspiracy to operate an unlicensed money-transmitting business, delivering a verdict that has reignited debates over the legal boundaries of decentralized finance (DeFi) innovation. The jury, however, could not reach a unanimous decision on charges of money laundering and conspiring to violate sanctions, resulting in not guilty rulings on several counts [1]. The mixed outcome offers a relatively more favorable position for Storm, yet the conviction on the unlicensed business charge remains a significant legal setback.

Storm faces up to five years in prison for the conviction, which centers on allegations that Tornado Cash was used by malicious actors, including the Lazarus Group, to launder over $1 billion in illicit funds. Prosecutors argue that the developer knowingly created a platform that facilitated such activities, despite Storm’s legal team defending him by highlighting that unauthorized users exploited the system beyond his control [2]. This defense, while unsuccessful on one count, raises a broader question about developer liability in the decentralized space, where control over user behavior is inherently limited.

The U.S. Securities and Exchange Commission (SEC) has publicly weighed into the case, defending Storm and warning that his conviction could create a problematic precedent for open-source software developers. The SEC emphasized that the misuse of Tornado Cash should not be attributed to its creators, but rather to the malicious actors who manipulated the platform for illicit gains [3]. This intervention highlights the growing divide between regulators seeking accountability and developers advocating for the protection of innovation.

Tornado Cash, designed to enhance privacy in blockchain transactions, was added to the U.S. Treasury’s sanctions list in 2022. This move has been met with strong criticism from parts of the crypto community, who argue that it undermines the principles of decentralization and could discourage further development of privacy tools. The recent legal outcome adds another layer of complexity to this ongoing debate, as courts continue to define the regulatory landscape for decentralized infrastructure.

The verdict has also had immediate financial repercussions for TORN Coin, the native token of Tornado Cash. Following the announcement of the conviction on the unlicensed business charge, the token saw a sharp decline, dropping into double-digit losses. Centralized exchanges had previously delisted the token during the legal proceedings, but the crypto community has continued to support its value. TORN is currently struggling to hold the $10 support level, with its next key resistance at $11.80. A sustained downturn could push the price toward $8.50.

Roman Storm’s legal battle underscores the challenges of applying traditional financial regulations to the rapidly evolving crypto ecosystem. As courts, regulators, and developers navigate these tensions, the outcome of this case may serve as a pivotal reference point in the future regulation of decentralized platforms. The balance between privacy, innovation, and accountability remains an unresolved issue, and the Roman Storm case is likely to shape the next phase of this debate.

Sources:

[1] title1.............................(https://financefeeds.com/tornado-cashs-roman-storm-found-guilty-faces-up-to-five-years/)

[2] title2.............................(https://en.cryptonomist.ch/2025/08/05/the-sec-defends-roman-storm-in-the-tornado-cash-case/)

[3] title3.............................(https://news.co.za/)