Roman Storm Convicted of Unlicensed Crypto Money Transmittal in Landmark Case

Roman Storm, co-founder of the decentralized cryptocurrency mixing service Tornado Cash, was convicted by a Manhattan jury on August 2, 2025, of conspiracy to operate an unlicensed money transmittal business. The verdict came after a three-week trial in the U.S. District Court for the Southern District of New York (SDNY), presided over by Judge Katherine Polk Failla. Storm now faces a maximum prison sentence of up to five years [2]. The conviction marks a significant legal development for the crypto industry, particularly for projects involving decentralized privacy tools.

The jury reached a unanimous decision on the charge of conspiracy to operate an unlicensed money transmittal business, but deadlocked on two other counts: conspiracy to commit money laundering and conspiracy to violate U.S. sanctions, particularly those targeting North Korea. As a result, the judge declared a partial mistrial on these charges [4]. During the trial, prosecutors argued that Storm had the technical capability to modify Tornado Cash to prevent its misuse for illicit activities but chose not to do so. His defense team, however, emphasized the open-source nature of the software and its intended purpose of protecting user privacy [3].

Storm was originally indicted in August 2023 on three counts, including money laundering and violations of U.S. sanctions. He pleaded not guilty and remained free on bail during the trial. His legal defense fund, supported by key figures in the crypto space, raised over $3 million, with contributions from Ethereum co-founder Vitalik Buterin and Paradigm founder Matt Huang [3]. Despite his conviction, Storm maintained his innocence at the time of the verdict, and a sentencing hearing has yet to be scheduled.

The ruling has broader implications for the decentralized finance (DeFi) ecosystem. Tornado Cash, which allows users to obscure the origin of their digital assets, has long been a focal point of debate between privacy advocates and regulators. The conviction of its co-founder could set a precedent for future legal actions against open-source financial protocols and their developers. Judge Failla reportedly referenced prior high-profile crypto-related cases—such as those involving former FTX CEO Sam Bankman-Fried and OneCoin co-founder Karl Greenwood—indicating an awareness of the broader legal landscape [3].

The verdict also highlights the ongoing tension between innovation and regulation in the rapidly evolving crypto space. As enforcement agencies continue to investigate and prosecute cases involving decentralized technologies, developers and users are increasingly navigating a complex and uncertain legal environment [5]. The case has drawn widespread attention in the crypto community, with mixed reactions: some view it as a threat to privacy-focused development, while others see it as a necessary step in curbing the misuse of blockchain for criminal activities [1].

The impact of the ruling on Tornado Cash’s operations and the broader Ethereum market is yet to be fully realized. While immediate on-chain activity has not shown significant shifts, the long-term regulatory implications could influence the future development and adoption of decentralized financial tools.

Sources:

[1] Department (https://www.justice.gov/usao-sdny/pr/founder-tornado-cash-crypto-mixing-service-convicted-knowingly-transmitting-criminal)

[2] The (https://www.wsj.com/finance/currencies/developer-of-crypto-mixer-tornado-cash-found-guilty-on-one-criminal-charge-a1c32405?gaa_at=eafs&gaa_n=ASWzDAjudxDYH4O0EnnCuWVsCUpouiNdsfNrq_lO_0GpWnopQ-vtGhFIIAXL&gaa_sig=NIVVVGYE9IGI-1GizNQZxUS6opX3bRTnRLXlc96330sEiEFWIGdi6QyvQ_YT4YXeGFD2XCwaAg3nC6wLTDpATw%3D%3D&gaa_ts=6893cf38)

[3] Cointelegraph (https://cointelegraph.com/news/tornado-cash-roman-storm-found-guilty-partial-verdict)

[4] Law.com (https://www.law.com/newyorklawjournal/2025/08/06/judge-declares-partial-mistrial-in-crypto-mixer-money-laundering-case/)

[5] CoinCentral (https://coincentral.com/crypto-developer-roman-storm-found-guilty-in-tornado-cash-case/)