Tornado Cash Co-Founder Guilty of Operating Unlicensed Crypto Service

Roman Storm, co-founder of Tornado Cash, was found guilty on August 6, 2025, in a Manhattan federal court of conspiring to operate an unlicensed money-transmitting business. The conviction, however, was limited to one of the counts, with the jury unable to reach a verdict on the more severe charges of money laundering and sanctions violations, resulting in a partial mistrial. Storm now awaits sentencing, which could carry a maximum penalty of five years in prison [1].

The case has sparked significant interest within the cryptocurrency community and legal sector, highlighting the growing tension between open-source blockchain development and U.S. regulatory enforcement. Prosecutors argued that Storm knowingly enabled criminal activities by allowing groups like North Korea's Lazarus Group to launder over $1 billion in stolen cryptocurrency through Tornado Cash. The U.S. Department of Justice estimated that $300 million in illicit funds passed through the platform, including proceeds from the Ronin network hack, which was attributed to the Lazarus Group by the FBI [1].

Storm’s defense team expressed relief over the lack of conviction on the two more severe charges, which could have led to decades in prison. According to Brian Klein, Storm’s attorney, his client did not intend to assist criminals and emphasized that Tornado Cash was created as a privacy tool, not as a mechanism for criminal activity [1].

Prosecutors presented evidence suggesting that Storm and his co-founders designed Tornado Cash to profit from criminal activity. The service reportedly generated over $12 million in revenue from 2020 to 2022. The U.S. Treasury sanctioned Tornado Cash in 2022 for its role in facilitating North Korean money laundering, and both Storm and his co-founder Roman Semenov were indicted in 2023. Semenov remains a fugitive, while Storm was released on a $2 million bond [1].

In 2024, Tornado Cash co-founder Alexey Pertsev was arrested in the Netherlands and later sentenced to more than five years in prison for allegedly laundering $1.2 billion. His conviction served as a legal precedent in the U.S. case against Storm. The defense has indicated it will appeal the conviction, and the Department of Justice may reassess the unresolved charges and determine whether to pursue a retrial [1].

The outcome of this case carries broader implications for the development of decentralized platforms, particularly those focused on privacy. It raises critical questions about how U.S. regulators will treat open-source tools designed to enhance financial privacy. As the legal battle continues, developers and the broader cryptocurrency industry are closely watching how the court’s decision may shape future regulatory approaches and influence the design of new crypto tools [1].

Source: [1] Tornado Cash Co-Founder Found Guilty in Manhattan Trial (https://www.livebitcoinnews.com/tornado-cash-co-founder-found-guilty-in-manhattan-trial/)