Tornado Cash Co-Founder Guilty of Unlicensed Money Transmission Charge

Roman Storm, co-founder of the cryptocurrency privacy tool Tornado Cash, was found guilty by a federal jury in New York of conspiring to operate an unlicensed money transmitting business. The conviction, delivered on July 24, 2025, in the U.S. District Court for the Southern District of New York, marks a pivotal moment in the ongoing legal debate surrounding the regulation of decentralized finance (DeFi) technologies [1]. The charge carries a maximum sentence of five years in prison, though sentencing has yet to be scheduled [3].

The U.S. Department of Justice (DOJ) alleged that Tornado Cash was used to facilitate over $1 billion in illicit transactions, including a significant portion linked to the Ronin Network hack attributed to North Korea’s Lazarus Group, a state-backed hacking organization under U.S. sanctions [4]. Prosecutors argued that Storm played an active role in developing and maintaining the platform, with evidence showing he contributed to key features, funded infrastructure, and promoted the service [1]. They emphasized that Storm continued to use Tornado Cash even after becoming aware of its misuse for criminal activity [1].

Storm’s defense team contested the charges, asserting that Tornado Cash is a neutral, open-source tool with legitimate use cases and that he was unaware of its potential for abuse. They claimed that any misuse of the platform was outside his control and that his response to the Lazarus Group’s exploitation of Tornado Cash was one of frustration, not complicity [4]. Despite these arguments, the jury returned a guilty verdict on the unlicensed money transmission charge, though it deadlocked on two other counts: money laundering and sanctions violations [4].

Judge Katherine Polk Failla presided over the trial and acknowledged the jury’s inability to reach a full verdict, noting the complexity of the case and the challenges in distinguishing between legitimate and illicit uses of the technology [4]. Storm, who has pleaded not guilty to all charges, may seek to have the conviction dismissed or appeal it after sentencing [2]. The outcome raises pressing questions about the legal status of decentralized technologies and the extent to which their creators can be held responsible for their misuse [6].

The ruling has sparked mixed reactions from the cryptocurrency community. Some see it as a landmark in the regulation of DeFi, while others argue it represents an overreach into the domain of open-source software development [6]. Legal experts, including Jake Chervinsky, Chief Legal Officer at Variant, have expressed disappointment, calling the ruling a “sad day for DeFi” and suggesting that the charges were inappropriate given that Tornado Cash is a non-custodial protocol [1]. Chervinsky recommended appealing the case, hoping higher courts will reassess the application of Section 1960 to developers who do not manage user funds [1].

The verdict also highlights the growing scrutiny of crypto tools that enable anonymity, particularly in the context of sanctions enforcement and anti-money laundering efforts [5]. US Attorney Jay Clayton emphasized the importance of accountability in the crypto space, noting that digital assets must not be used to hide criminal activities [1]. As the case moves forward, it will have broader implications for the future of DeFi and the legal treatment of developers in the rapidly evolving crypto landscape [6].

Sources:

[1] Department. (2025). Founder of Tornado Cash Crypto Mixing Service Convicted. https://www.justice.gov/usao-sdny/pr/founder-tornado-cash-crypto-mixing-service-convicted-knowingly-transmitting-criminal

[2] Reuters. (2025). U.S. Jury Deadlocks on Tornado Cash Founder's Money Laundering Charge. https://www.reuters.com/legal/government/us-jury-deadlocks-tornado-cash-founders-money-laundering-charge-2025-08-06/

[3] AML Intelligence. (2025). News: Tornado Cash Founder Roman Storm Found Guilty of Operating Unlicensed Money Transmitter. https://www.amlintelligence.com/2025/08/news-tornado-cash-founder-roman-storm-found-guilty-of-operating-unlicensed-money-transmitter/

[4] CryptoDnes.bg. (2025). Tornado Cash Co-Founder Found Guilty of Operating Unlicensed Money Transmission Business. https://cryptodnes.bg/en/tornado-cash-co-founder-found-guilty-of-operating-unlicensed-money-transmitter/

[5] CoinDesk. (2025). Roman Storm Guilty of Unlicensed Money Transmitting Conspiracy in Partial Verdict. https://www.coindesk.com/policy/2025/08/06/roman-storm-guilty-of-unlicensed-money-transmitting-conspiracy-in-partial-verdict

[6] The Wall Street Journal. (2025). Developer of Crypto Mixer Tornado Cash Found Guilty on One Criminal Charge. https://www.wsj.com/finance/currencies/developer-of-crypto-mixer-tornado-cash-found-guilty-on-one-criminal-charge-a1c32405?gaa_at=eafs&gaa_n=ASWzDAhJTsP86ztnGlLElnHAso85iywyIfHsu1wmsPd_0GKi3s4RIN6k8YhW&gaa_sig=Xq6HFp0Q78qcx3P-oK5M8CgK14JzlPafcNhRa2XYg1m_O0hks8ryS50z5fSRoLpKdS2Te-0aEeyK7_bDhfuXiA%3D%3D&gaa_ts=68947b07

[7] CoinCentral. (2025). Tornado Cash Co-Founder Roman Storm Found Guilty on Money Transmitting Charge. https://coincentral.com/tornado-cash-co-founder-roman-storm-found-guilty-on-money-transmitting-charge/