Tornado Cash Co-Founder Convicted of Operating Unlicensed Crypto Transmitter
A Manhattan jury has delivered a guilty verdict against Roman Storm, co-founder and developer of Tornado Cash, following a three-week trial in the US District Court for the Southern District of New York. The jury convicted Storm on one felony charge of conspiracy to operate an unlicensed money transmittal business, though they failed to reach unanimous decisions on conspiracy to commit money laundering and conspiracy to violate North Korea sanctions charges.
The conviction on the money transmittal charge carries a potential maximum sentence of five years in prison. After four days of deliberations, jurors initially informed the court early Wednesday that they had reached an impasse on certain charges, leading the judge to provide special instructions encouraging them to work toward a unanimous decision.
Founder of Tornado Cash convicted. “The speed, efficiency, and functionality of stablecoins and other digital assets offer great promise, but that promise cannot be an excuse for criminality,” said USA Jay Clayton. https://t.co/NbA3B7SVDI
— US Attorney SDNY (@SDNYnews) August 6, 2025
Prosecution’s Case and Defense Strategy
Federal prosecutors built their case around testimony from witnesses including representatives from the Federal Bureau of Investigation, Internal Revenue Service, and hackers. These witnesses argued that Storm possessed the technical capability to modify Tornado Cash’s underlying code to prevent criminal misuse but deliberately chose not to implement such measures. Storm’s defense team countered with their own expert witnesses, including Ethereum core developer Preston Van Loon and NAXO co-founder Matthew Edman.
Storm faced his initial indictment in August 2023 on charges including money laundering, conspiracy to operate an unlicensed money transmitter, and conspiracy to violate US sanctions. He entered a not guilty plea and remained free on bail throughout the legal proceedings leading up to trial.
Legal Precedent and Sentencing Outlook
Judge Katherine Failla reportedly indicated during the trial that she was considering precedents set by other cryptocurrency-related cases handled in the Southern District of New York. These cases include former FTX CEO Sam Bankman-Fried, former OpenSea product manager Nathaniel Chastain, and OneCoin co-founder Karl Greenwood, all of whom received prison sentences.
Storm’s sentencing hearing remains unscheduled, and he maintained his innocence both before and during the trial proceedings. The crypto community rallied behind Storm’s legal defense, contributing over $3 million to his legal fund. Notable donors included Ethereum co-founder Vitalik Buterin, Paradigm founder Matt Huang, and the Ethereum Foundation.
Regulatory Implications for DeFi
This verdict represents a significant development in the ongoing regulatory scrutiny of decentralized finance protocols and privacy-focused cryptocurrency services. The outcome may influence how developers approach compliance measures when building similar platforms in the future.