Roman Storm, a co-founder of the cryptocurrency privacy tool Tornado Cash, was convicted on August 6, 2025, in a Manhattan federal court for conspiracy to operate an unlicensed money transmitting business. The verdict, delivered by a jury after four days of deliberation, found Storm guilty of the single charge, which carries a maximum sentence of five years in prison. This decision marks a significant development in a closely watched case with broad implications for the decentralized finance (DeFi) industry.
Tornado Cash, co-developed by Storm, Alexey Pertsev, and Roman Semenov, functions as a crypto mixer designed to enhance transaction privacy. Prosecutors argued the platform served as a "giant washing machine," facilitating the laundering of over $1 billion in illicit funds, including those stolen by the North Korean-linked Lazarus Group. The U.S. Department of Justice (DOJ) maintained that Storm was aware of and enabled the platform's use by criminals.
Despite the conviction on the unlicensed money transmission charge, the jury remained deadlocked on more severe charges of money laundering and acquitted Storm of sanctions violations related to the International Emergency Economic Powers Act (IEEPA). This split verdict is considered a partial victory for Storm, as it spared him from potential decades in prison. A sentencing date has not yet been scheduled, and Storm remains free on bail.
Storm's defense team argued that Tornado Cash was a decentralized, open-source protocol that operated autonomously once deployed, beyond the control of its creators. The conviction has sparked considerable concern within the crypto community, with many viewing it as a precedent that could impact open-source developers and the future of privacy tools. As crypto legal expert Jake Chervinsky stated in a tweet, it is "a sad day for DeFi," reflecting widespread apprehension about developer liability.
The Department of Justice is expected to decide in the coming days whether to pursue a retrial on the deadlocked money laundering and sanctions charges. Storm's legal team has already indicated plans to appeal the conviction, citing concerns about the application of existing financial regulations to decentralized technologies. This case, alongside the conviction of co-founder Alexey Pertsev in the Netherlands and the fugitive status of Roman Semenov, sets a critical precedent for how regulatory bodies will approach the burgeoning DeFi space.