Roman Storm, a developer of the crypto tool Tornado Cash, was found guilty in New York of conspiring to operate an unlicensed money transmitting business. He faces up to five years in federal prison. The DOJ had charged him with conspiracy to commit money laundering, among other things, but the jury couldn’t agree on that count.
After a four-week trial and five days of deliberation, the jury returned a mixed verdict. They found Storm guilty of operating an unlicensed money transmitting business but not guilty of sanctions evasion. The jury couldn’t reach a verdict on the money laundering charge, which could have meant up to 20 years in prison. His lawyer, Brian Klein, expressed relief over the not-guilty verdicts and plans to challenge the remaining conviction.
Storm’s supporters in the crypto world are breathing a sigh of relief. They pitched this case as a fight over the right to develop peer-to-peer crypto software, and the jury’s decision on money laundering could have broader implications for the crypto scene. Matthew Green, a Johns Hopkins University associate professor, noted this could impact the whole industry, not just those working on privacy tools.
Tornado Cash was created in 2019 to hide crypto ownership by pooling funds and redistributing them, disrupting the blockchain transaction trail. This was supposed to enhance privacy for crypto owners—privacy that’s become crucial as crypto holders face threats like kidnappings.
But the U.S. government saw Tornado Cash as a money laundering tool. They claimed Storm built a platform that let criminals launder over $1 billion, including hackers linked to North Korea. Prosecutors argued that the privacy angle was just a cover for hiding dirty money. They even pointed out that Storm and his team wore shirts with washing machines, supposedly mocking the legal concerns.
Storm’s defense argued he developed the technology but didn’t engage in criminal activity himself. They claimed he had no control over Tornado Cash’s misuse because it was decentralized, putting the focus on its potential legitimate uses. The jury saw merit in this, convicting him only on the lesser charge.
Storm awaits sentencing, while the DOJ decides if they’ll retry him on the hung money laundering charge. Experts like Mark Bini, a former federal prosecutor, believe the government might push for a stiff sentence, but the jury’s mixed verdict could dampen their case’s impact.
