Shocking verdict out on Tornado Cash case

Shocking verdict out on Tornado Cash case originally appeared on TheStreet.

A Manhattan jury found Tornado Cash co-founder Roman Storm guilty of conspiracy to operate an unlicensed money transmitting business in a split verdict on Aug. 6, the Inner City Press reported.

However, there are still two charges on which they couldn't reach a verdict: money laundering and sanction violations. We will know in the next few days if the Department of Justice (DoJ) will pursue these charges in a new trial.

Launched in 2019, Tornado Cash is an open-source, non-custodial, and fully decentralized cryptocurrency mixer that pools different crypto funds together so as to obscure the trail of the money flow.

While the authorities have frequently criticized the service for concealing funds belonging to malicious actors, those championing Tornado Cash underline the value of privacy and individual freedom in on-chain transactions.

Read More: The Roman Storm Tornado Cash trial explained

While witnesses from the prosecutor’s side included officers belonging to the Federal Bureau of Investigation, the Internal Revenue Service, etc., and hackers, who argued that Storm was competent enough to modify the code to prevent Tornado Cash's misuse by bad actors, but he chose not to act.

The defense's side put forth Ethereum core developer Preston Van Loon and NAXO co-founder Matthew Edman, among other experts, who testified in the developer's defense.

Storm has been found convicted of the charge of unlicensed money transmitting, which carries a maximum sentence of up to five years in prison.

3 years ago...

It was nearly three years ago on Aug. 8, 2022, that the Office of Foreign Assets Control (OFAC), a financial intelligence and enforcement agency of the Treasury Department, sanctioned Tornado Cash.

It alleged that Lazarus Group, the notorious hacking group linked to North Korea, had used the service to launder stolen crypto assets worth $455 million. The mixer facilitated laundering of assets worth over $7 billion, the OFAC claimed.

Join the discussion with CryptoWendyO on Roundtable here.

On Nov. 20, 2024, a federal appeals court ruled that the Treasury had overstepped its authority while sanctioning the service. Smart contract-based services do not inherently violate laws, the court ruled.

On March 21, 2025, the Treasury lifted sanctions against the crypto mixer.

However, the case for which the verdict has just come out began on Aug. 23, 2023, when the DoJ charged Storm, along with another Tornado Cash co-founder Roman Semenov, for laundering funds worth more than $1 billion.

Story Continues## Crypto community throws support behind Storm

So far, Storm has argued that developers should be able to freely write code without fearing consequences due to misuse by any third parties.

"If I lose, DeFi dies with me. The dream of financial freedom, the code I believed in—it all fades into darkness. I’m fighting, but the weight is unbearable," Storm wrote on X on June 13 as the trial loomed.

The crypto industry has taken the same line of defense In fact, the idea for Tornado Cash itself had come from Ethereum co-founder Vitalik Buterin himself, who had engaged in discussions around on-chain privacy with Storm. The crypto mixing service runs on Ethereum Virtual Machine-compatible networks.

Join the discussion with Scott Melker on Roundtable here.

Storm has found support among the ranks of Buterin and the Ethereum Foundation. Supporters raised over $3 million to put up the legal defense.

Needless to say, the latest verdict has shocked the crypto community. Bitwise's research analyst Danny Nelson called it "a disaster for DeFi developers."

The crucial question still remains if a developer can really control the use of a code or a program by third parties and be held accountable for its misuse.

Shocking verdict out on Tornado Cash case first appeared on TheStreet on Aug 6, 2025

This story was originally reported by TheStreet on Aug 6, 2025, where it first appeared.

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