Tornado Cash Co-Founder Storm Guilty of Unlicensed Money Transmission in U.S. Trial

Roman Storm, co-founder of Tornado Cash, was found guilty on August 12, 2025, on a charge of conspiracy to operate an unlicensed money transmitting business under U.S. federal law. The verdict stems from a trial in the U.S. District Court for the Southern District of New York, where a jury was unable to reach a consensus on two other, more severe charges. Storm now faces an imminent sentencing hearing, though no date has been set. Prosecutors have argued that Tornado Cash, a privacy-focused Ethereum-based mixer, enabled financial crime by obscuring the trail of illicit funds, particularly those tied to sanctioned entities. Defense attorneys, meanwhile, have emphasized the decentralized nature of the platform and the lack of centralized control [4].

The potential for a retrial remains a key point of legal discussion. On August 6, 2025, Judge Katherine Failla approved a procedural extension, delaying any retrial until December 18, 2025. This decision allows Storm’s legal team additional time to prepare post-trial motions and appeals. Failla noted that “the ends of justice would be served by excluding time from now until December 18, 2025,” prioritizing thorough legal preparation over a speedy retrial [4].

The outcome has drawn attention from both supporters and critics within the DeFi community. Some argue that the conviction sets a necessary precedent for holding developers accountable for tools that can be exploited for illegal purposes. Others, however, view the case as a threat to the broader vision of financial privacy and autonomy in the crypto space. Vitalik Buterin, co-founder of Ethereum, has publicly supported Storm, pledging $500,000 to cover part of his legal costs. Buterin has argued that privacy should be a default feature of digital wallets, rather than a niche offering [9]. Josh Swihart, CEO of Electric Coin Company, has also called for legislative protections for financial privacy in an upcoming major crypto bill [9].

The timing of Storm’s trial coincided with broader regulatory developments in the crypto space. On the same week, Do Kwon, founder of Terraform Labs, pleaded guilty to wire fraud charges related to the collapse of the Terra blockchain and its stablecoin, UST [1]. This has led to speculation about a potential regulatory crackdown on crypto projects that operate outside traditional financial systems. The legal actions against both Kwon and Storm highlight the growing scrutiny of DeFi projects by U.S. authorities, particularly those that offer privacy features that may complicate regulatory oversight.

Storm’s case also intersects with a White House report released in early August 2025, which proposed expanding anti-money laundering (AML) regulations to cover decentralized finance protocols. The report suggested that DeFi platforms with centralized governance structures should be held to the same compliance standards as traditional financial institutions. Critics within the DeFi community argue that such measures could stifle innovation and push privacy-focused projects underground [9].

Prosecutors in Storm’s case have maintained that Tornado Cash’s design inherently facilitates financial crime, particularly in violation of U.S. sanctions. Defense attorneys have countered that the platform’s decentralized nature means users bear responsibility for how they use it. The jury’s inability to reach a verdict on the more severe charges suggests some division over the extent of Storm’s liability [4].

With the guilty verdict now secured, the focus shifts to sentencing, which is expected in the coming weeks. Legal experts are closely watching how the court assesses Storm’s role in the development and deployment of Tornado Cash, as well as the broader implications for future DeFi projects that prioritize privacy as a core feature. The outcome could shape not only the future of Tornado Cash but also the regulatory environment for privacy-focused tools in the crypto ecosystem [4].

As the legal and regulatory landscape for DeFi continues to evolve, the case of Roman Storm and Tornado Cash is likely to remain a pivotal moment in the ongoing debate over the balance between privacy, innovation, and compliance in the world of decentralized finance [9].

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Source: [1] Do Kwon pleads guilty to two charges related to his role at ... (https://cointelegraph.com/news/do-kwon-guilty-fraud-terraform-labs)

[4] Tornado Cash dev Storm guilty of money transmission — but jurors deadlocked on most severe charges (https://www.dlnews.com/articles/regulation/crypto-law-bonanza-raises-concerns-around-agencies-have-enough-staff/)

[9] Crypto privacy tests limits of Trump's deregulatory push (https://www.dlnews.com/articles/defi/crypto-privacy-tests-limits-of-trump-deregulatory-push/)

[12] Manhattan federal prosecutors Wednesday made their final arguments in the money laundering and sanctions trial of Tornado Cash co-founder Roman Storm (https://www.law360.com/newyork/news?amp%3Butm_campaign=newyork&%3Butm_content=2025-08-11&%3Butm_medium=email&%3Butm_source=newsletter&nl_pk=110fc597-0318-49d5-b5f5-6519cfae9a4f&page=5)