Roman Storm's Tornado Cash Verdict: What It Means for Crypto

On August 6, 2025, a federal jury issued a mixed verdict in the case brought against Roman Storm, co‑founder of Tornado Cash. Jurors deadlocked on the most serious allegations—conspiracy to commit money laundering and conspiracy to violate sanctions—and returned a conviction only on a lesser charge: conspiracy to operate an unlicensed money transmitting business. This verdict could change crypto in the US.

The following opinion editorial was written by Alex Forehand and Michael Handelsman for Kelman.Law.

The Verdict: Key Points

Hung Jury on Major Counts: After several days of deliberation, jurors were unable to unanimously agree on the money laundering and sanctions evasion counts—each carrying potential sentences of up to 20 years. As a result, those charges ended in a partial mistrial.

Conviction for Unlicensed Money Transmitting Business: The jury did find Storm guilty of running an unlicensed money transmitting business, which may carry a sentence of up to five years. Importantly, this count has no ties to allegations of illicit funds or hackers.

Remand Denied: Prosecutors urged Storm’s remand to custody post-verdict, citing alleged immigration misconduct, Russian ties, and substantial crypto holdings. But the court declined, instead allowing Storm to remain free on bail pending sentencing. Judge Katherine Failla concluded he was not a flight risk, stressing his strong U.S. ties and the ongoing legal process.

Distinguishing Software

At the heart of the case against Roman Storm was a central—and unresolved—legal question: Can the development and publication of open-source, autonomous software constitute a criminal act if others use it for unlawful purposes?

Storm’s defense team made clear that Tornado Cash, once deployed, operated without any custodial control or discretionary decision-making by its creators. Like Bitcoin or BitTorrent, the Tornado Cash protocol was permissionless and immutable—meaning no one, not even its founders, could reverse or moderate its use.

In this light, Storm’s role was likened more to that of a software engineer than a financial service provider. He did not custody user funds, did not profit from specific transactions, and did not design Tornado Cash to promote crime. Instead, the tool offered on-chain privacy, serving both lawful users seeking anonymity (e.g., activists, whistleblowers, and high-net-worth individuals) and, admittedly, some bad actors.

Jury Skepticism Signals Legal Uncertainty

The jury’s inability to convict Storm on the most serious charges—money laundering and sanctions evasion—highlights what many observers saw throughout the trial: a fundamental discomfort with the government’s theory of liability.

While prosecutors argued that Storm had “aided and abetted” foreign hackers by building a tool they later used, jurors appeared hesitant to draw a straight line between code publication and criminal facilitation. The law has long distinguished between active participation in illegal conduct and the creation of neutral tools that might be misused—a distinction that seemed to resonate with at least some jurors.

Importantly, the deadlocked counts suggest that the jury was not convinced that Storm had the requisite intent or control to support criminal liability under money laundering or sanctions laws. If anything, this signals that courts and juries may remain divided on how far U.S. criminal law should stretch to cover decentralized technology and its developers.

In the crypto community, this outcome may be read as a partial validation of the idea that “code is law”—and that accountability must be grounded in provable conduct, not speculation or guilt by association.

Broader Implications for the Crypto Industry

This case has already become a bellwether for privacy tools, DeFi platforms, and open-source development, and the implications for the crypto industry are far-reaching.

If software developers can be held criminally liable for deploying code that others use for unlawful purposes, then the chilling effect on innovation could be enormous. Projects involving mixers, zero-knowledge proofs, multi-party computation, and other privacy-preserving protocols could face existential legal risk—not for what they do, but for how someone else might use them.

Furthermore, this conviction—albeit limited—raises questions about how regulators interpret “money transmission” in a non-custodial setting. Traditionally, transmission has required the receipt and transfer of funds on behalf of another. Yet Storm was convicted for merely developing and launching a protocol that enabled peer-to-protocol interactions, with no discretion over those interactions. If upheld, this precedent could effectively broaden the definition of “money transmitter” to include software developers.

Many in the industry are now watching the sentencing and appeal closely, as the outcome could shape how projects are built and launched moving forward. At stake is not just one developer’s fate, but the future of decentralized privacy and the limits of criminal liability in a permissionless ecosystem.

What This Case Means

Vindication on the major accusations of laundering and sanctions violations shows that Storm’s role as a software developer was clearly distinguished from actual criminal conduct. The lone guilty verdict reflects a narrower legal interpretation of “money transmitting,” not a judgment on criminal intent or illicit motivations. This underscores the importance of preserving decentralization and open-source development without exposure to overbroad criminal liability.

Storm’s case remains one of the most significant tests yet of how U.S. law interprets decentralized software and the boundaries of criminal intent on technical pathways.

What’s Next

While there is yet to be a date set for sentencing, sentencing usually occurs in the coming months following a verdict. However, Storm’s legal team plans to challenge the guilty count, arguing it mischaracterizes software development and fails to meet statutory requirements.

Because the other two counts ended in a partial mistrial, the DOJ has the option of getting a second bite at the apple. Thus, the DOJ may either retry Storm on the other two counts or proceed directly to sentencing after consultation internally.

Conclusion

Roman Storm’s partial victory—escaping conviction on the most serious charges—represents critical recognition of the defense’s argument: Tornado Cash is privacy-preserving software, not a criminal enterprise. While the unlicensed transmission conviction remains, Storm and his team remain committed to appealing and clarifying this legal precedent to defend software developers and blockchain innovation.

This article originally appeared at Kelman.law.