Tornado Cash Creator Found Guilty of Unauthorized Money Transfer
Roman Storm, a key player in the creation of Tornado Cash, has been declared guilty by a jury in Manhattan for operating a money transmitting business without a license. This verdict followed four weeks of hearings and discussions. The charge could potentially imprison him for as long as five years. However, this is merely a fragment of a larger legal confrontation, and the situation is not resolved yet.
Jury Deadlocked on Major Allegations
Storm was also contending with allegations of money laundering and breaching U.S. sanctions, yet the jury failed to come to a consensus on these issues. Each of these accusations carries significantly harsher penalties, up to 20 years in prison if convicted. Since a conclusive verdict wasn’t reached, prosecutors may opt to pursue these charges in a retrial. His sentencing for the conviction that was adjudicated has not yet been arranged.
The Tornado Cash trial has wrapped up.
Roman Storm has been convicted of the conspiracy to operate an unlicensed MTB charge.
Here are my reflections on the result, the government’s (dismissed) motion to remand Storm, and the next steps. pic.twitter.com/T41TtEL9Kh
— Frank Corva (@frankcorva) August 6, 2025
Prosecutors Argue Storm Aided Criminal Activities
Federal prosecutors were unrelenting in their stance. They claimed that Tornado Cash was more than just a privacy mechanism; it served as a direct conduit for illicit funds to be laundered. They alleged that over a billion dollars funneled through the mixing service, much of it connected to criminals, fraudsters, and even North Korea’s Lazarus Group. The government’s message was unmistakable: it’s unacceptable to develop a tool while ignoring its misuse by the most nefarious actors online.
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Defense Claims It Was Merely Code
Storm’s attorneys mounted a robust defense, contending that he merely created code and released it as open-source software. They argued that it was akin to someone developing a tool that could be beneficial or harmful and subsequently disassociating from it. They asserted that Storm never had authority over who utilized it or for what intentions and did not personally gain from any of the actions highlighted by prosecutors.
Evidence Presented a Complex Narrative
Throughout the trial, prosecutors introduced forensic evidence and eyewitness accounts that linked Tornado Cash to misappropriated digital currency. One fraudster claimed to have used it for laundering proceeds from NFTs. They even displayed Tornado Cash t-shirts adorned with cartoon washing machines, suggesting the platform’s association as a digital money laundering service. Yet, despite this, jurors could not unanimously declare Storm guilty of laundering or violating sanctions.
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Significant Consequences for Developers
The verdict has triggered heightened concerns among developers. If crafting open-source tools can result in prison sentences, where does one set the boundaries? Numerous crypto applications and protocols may be exploited for illicit ends, but are developers liable when unscrupulous individuals utilize them? This case intensifies a broader dialogue regarding the extent of legal accountability within decentralized settings.
A Piece of a Broader Crackdown
Storm is not alone in facing scrutiny. His Tornado Cash counterpart, Alexey Pertsev, was sentenced earlier this year in the Netherlands. Additionally, in the United States, the individuals behind the Samourai Digital wallet mixer recently admitted guilt for laundering hundreds of millions in illegal cryptocurrency. Regulators and law enforcement are clearly taking a firmer stance on these matters.
Upcoming Developments
Storm is now awaiting sentencing, along with the potential for a retrial regarding the unresolved accusations. His legal representation intends to contest the verdict. Regardless of whether the government decides to pursue the more severe charges again, this case is expected to remain high profile. It has emerged as a reference point on how the justice system addresses privacy-focused tools that are misused by criminals. Currently, the distinction between developer and facilitator remains ambiguous.
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Key Takeaways
- Tornado Cash co-founder Roman Storm faced conviction for operating an unlicensed money transmitting entity and is at risk of five years in jail.
- The jury was unable to reach a resolution on the more severe charges of money laundering and sanctions breaches, which may see a retrial in the future.
- Prosecutors claimed Tornado Cash facilitated criminals, including North Korea’s Lazarus Group, laundering upwards of $1 billion in crypto asset.
- Storm’s defense argued that he simply authored and disseminated open-source code, lacking any control or financial gain from its application.
- The ruling has raised significant concerns among crypto developers about the legal ramifications when creating privacy tools that may be exploited by malicious actors.
The post Tornado Cash Founder Convicted of Unlicensed Money Transmitting appeared first on 99Bitcoins.
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