Was the money laundering conspiracy conviction of Tornado Cash's founder fair?
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Was the money laundering conspiracy conviction of Tornado Cash's founder fair?
Was the open-source developer an accomplice to crime? The jury found guilty on only one charge.
Navigating Web3 tides with focused insightsBy ChandlerZ, Foresight News
On August 6, 2025, a federal jury in Manhattan, New York, found Roman Storm, co-founder of Tornado Cash, guilty in a criminal case. The verdict immediately triggered strong reactions and widespread concern across the cryptocurrency industry.
Storm was charged with three counts: conspiracy to operate an unlicensed money transmitting business, conspiracy to commit money laundering, and conspiracy to violate U.S. sanctions against North Korea. After a three-week trial, the jury failed to reach a unanimous decision on the latter two felony charges, convicting him only on the charge of operating an unlicensed money transmitting business. That charge carries a maximum sentence of five years in prison.
Tornado Cash is a non-custodial privacy tool deployed on Ethereum that allows users to obscure transaction trails through smart contracts. It uses zero-knowledge proof (zk-SNARKs) technology: users deposit funds and later withdraw them using cryptographic vouchers, thereby concealing the origin and destination of the funds. Tornado Cash itself does not hold user funds and, once deployed, cannot be altered or shut down.
In August 2022, the U.S. Office of Foreign Assets Control (OFAC) added Tornado Cash to its sanctions list, accusing it of being used by hacking groups such as Lazarus for money laundering. However, in March 2025, the U.S. Fifth Circuit Court of Appeals ruled that OFAC had overstepped its authority, stating that smart contracts are not property and therefore cannot be sanctioned. Subsequently, OFAC lifted the sanctions on Tornado Cash and removed the associated Ethereum addresses. Nevertheless, Roman Storm's legal troubles continued.
Verdict Sparks Renewed Debate Over Legal and Technological Boundaries
Roman Storm is a software engineer and one of the early developers in the crypto space. He is best known as a co-founder of Tornado Cash. Alongside fellow co-founder Roman Semenov, Storm developed the project, which officially launched in 2019. Since its release, Tornado Cash has attracted a large user base, including attackers, scammers, and even state-sponsored hacking groups.
After launching Tornado Cash, Storm primarily focused on building and maintaining the front-end interface, authored technical documentation, and gave media interviews to promote the project during its early stages. He publicly supported blockchain privacy technologies and emphasized individual financial autonomy. In 2023, Storm was arrested by the U.S. Department of Justice, becoming the first developer charged in the Tornado Cash case.
The U.S. Department of Justice accused Storm and other developers of knowingly continuing to maintain the system despite awareness of its misuse, and of assisting in anonymous fund transfers through services like providing front-end interfaces and promotional materials. Prosecutors pointed out that organizations including the Lazarus Group used Tornado Cash to launder over $1 billion.
During the trial, prosecutors presented photos of Storm wearing a T-shirt with the phrase "anonymous money laundering," attempting to use this as evidence that he was aware of how the funds were being used. The jury ultimately could not reach a consensus on the money laundering and sanctions violations, leading the court to declare a mistrial on those two counts.
Following the verdict, prosecutors requested that Storm be detained, citing his birthplace in a former Soviet country (Kazakhstan) and claiming he had "flight risk conditions." Judge Katherine Failla denied the request, noting that Storm holds a U.S. passport, has long resided in Seattle, and lives with his young daughter, thus posing no flight risk.
Storm remains released on bail, and a sentencing date has not yet been set. His legal team stated they plan to challenge the conviction and file an appeal.
Developer Liability Under Scrutiny, Crypto Industry Reacts Strongly
Shortly after the verdict, multiple cryptocurrency industry organizations voiced their positions, challenging the classification of Tornado Cash as an "unlicensed money transmitting business." The central issue revolves around one key question: should open-source developers be held legally responsible for how others use their code?
The DeFi Education Fund posted on X: "We regret that the jury failed to recognize that Storm could not control third-party actions." The organization emphasized: "Software developers must have the right to write and deploy decentralized financial tools, including protocols with privacy features."
Peter Van Valkenburgh, Executive Director of Coin Center, also called the charges "inappropriate" and urged an immediate appeal. He stated that Coin Center would use all available resources to push for further judicial review of the case.
The Blockchain Association described the ruling as "disappointing" and warned it could create a chilling effect for all open-source software developers: "We urge Storm to appeal and stand ready to support him."
Several independent legal experts also commented on the case. Brian Klein, partner at Waymaker LLP and defense attorney for Storm, said: "The core issue here is whether someone can be put on trial simply because others used their code for illegal purposes." He argued that current laws do not apply to non-custodial systems like Tornado Cash and plans to continue challenging the conviction legally.
Alex Urbelis, General Counsel of the Ethereum Name Service, noted that the jury may have lacked sufficient understanding of how non-custodial protocols operate. He stated: "If the jury had fully understood that Tornado Cash does not control users' assets, this conviction should not have occurred."
Retrial Uncertain, Appeal Preparations Underway
Although the two unproven charges are currently on hold, the case is far from over. The prosecution has not yet decided whether to pursue a retrial on the money laundering and sanctions violation charges. However, many observers predict that given the jury’s prolonged inability to reach a consensus, the Department of Justice may choose to drop these two counts.
Storm responded defiantly. After the verdict, he echoed Donald Trump’s words, declaring he will "fight, fight, fight." His defense team stated that Storm will continue to contest the case in court and called for industry unity in addressing unclear regulatory boundaries.
Since Trump took office, there has been a trend toward weakening regulatory enforcement against crypto businesses, with several major cases dismissed or paused earlier this year. The Storm case remains one of the few high-profile prosecutions still moving forward. However, just last week, two developers of Samourai Wallet pleaded guilty to similar "unlicensed money transmitting" charges. This development has heightened concerns within the crypto industry about ongoing prosecutorial strategies.
Jake Chervinsky, Chief Legal Counsel at Variant, a crypto investment firm, pointed out that this conviction could provide precedent for future enforcement actions by the Financial Crimes Enforcement Network (FinCEN). He warned that if a developer can be imprisoned simply for writing code, it would introduce significant uncertainty across the entire open-source community.
Currently, Storm’s defense team is preparing appellate filings, aiming to overturn the verdict. Supporting organizations are also reaching out to additional legal experts and policy advocates, planning to push for clearer legislative guidance on developer liability.
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