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Tornado Cash Developer Convicted of Operating Unlicensed Money Service
Roman Storm, co-founder and developer of the cryptocurrency privacy tool Tornado Cash, has been found guilty by a Manhattan jury on one count – conspiracy to operate an unlicensed money transmitting business. The verdict came after four days of deliberation in the US District Court for the Southern District of New York.
The conviction carries a maximum sentence of up to five years in prison. Storm will remain free on bail until sentencing, which has not yet been scheduled.
Storm was arrested in 2023 and faced two other charges: conspiracy to commit money laundering and conspiracy to violate North Korea sanctions. The jury failed to reach a unanimous decision on these counts.
Prosecutors argued that Tornado Cash was being used by criminals, including hackers and cybercriminals, to launder more than $1 billion. However, Storm maintained his innocence throughout the trial, claiming he had no knowledge of illegal activities taking place through his platform.
Storm’s defense team brought in their own technical experts, including Ethereum core developer Preston Van Loon and NAXO co-founder Matthew Edman, who testified about the nature of decentralized software and privacy tools. The jury did not agree with prosecutors that Storm was aware of or intentionally facilitated illegal activity through Tornado Cash.
Alex Urbelis, general counsel for the Ethereum Name Service, called the verdict a “mixed bag” for the cryptocurrency community. While acknowledging some positive aspects to the case, he expressed disappointment at the conviction on unlicensed money transmission charges. “This is a complex area where legal nuance and technical understanding matter,” Urbelis said.
He emphasized that the distinction between custodial and non-custodial systems must be recognized. The verdict has raised concerns about the legal risks developers face when creating privacy-enhancing technologies, even if they do not control how users utilize their software.
Prosecutors have requested Storm’s detention until sentencing, citing a risk of flight. However, Judge Katherine Failla rejected this request, noting Storm’s family ties in the United States and the size of his bond. “He may appeal, he has every incentive to stay and fight,” Failla stated. “He is not a risk of flight, given the size of the bond. There are many fights left before sentencing, and I think Mr. Storm will be present for them.”
Storm’s legal defense received substantial support from the cryptocurrency community, with over $3 million raised to aid his defense fund. Key donors included Ethereum co-founder Vitalik Buterin, Paradigm founder Matt Huang, and the Ethereum Foundation.
The verdict comes shortly after Samourai Wallet developers pleaded guilty to operating an unlicensed money transmitting business in a deal that dropped more severe money laundering charges.
Source: blockonomi.com
