Macauley Peterson

Yesterday’s <a href="https://blockworks.co/news/roman-storm-guilty-one-count">partial verdict</a> in U.S. v. Roman Storm is about more than the fate of one Tornado Cash developer. It dampens hopes of giving DeFi protocols greater access to the US market by sending chills through the entire open‑source community.



Storm was found guilty under <a href="https://www.law.cornell.edu/uscode/text/18/1960">18 U.S.C. § 1960(b)(1)(C)</a>, which treats noncustodial code as &#8220;money transmitting&#8221; and thus a criminal offense, if it&#8217;s used by anyone for illicit purposes. In the <a href="https://x.com/preston_vanloon/status/1953137607853871516">words</a> of Ethereum core developer Preston van Loon: “This is a dark day for crypto and [Roman Storm].”



<h2 class="wp-block-heading">Sketchy legal foundations</h2>



At issue in rendering a verdict was how § 1960 defines “money transmission.” The law requires transmitting funds on behalf of the public and has traditionally meant moving others’ money as a custodial intermediary — not publishing permissionless code. Yet SDNY prosecutors convinced the jury that deploying <a href="https://blockworks.co/news/tornado-cash-sanctions-expose-potential-defi-achilles-heel">immutable smart contracts</a> meets that definition.



Coin Center executive director Peter Van Valkenburgh spoke to the flawed logic in <a href="https://twitter.com/i/spaces/1vAxRDQZeDDGl">a must-listen X space</a> on Wednesday: “I can’t transfer your funds if I don’t have them in my possession and in my control.” And yet that’s exactly how Storm’s Tornado Cash functioned: no custody, only code.



The government also shut out FinCEN’s own 2019 <a href="https://www.fincen.gov/sites/default/files/2019-05/FinCEN%20Guidance%20CVC%20FINAL%20508.pdf">guidance</a> on the matter, which explicitly carves out non‑custodial software providers from Money Service Business (MSB) liability, as DeFi Education Fund&#8217;s Amanda Tuminelli explained: “The DOJ said they don’t have to listen to that guidance…They can come up with their own interpretation.”



That <a href="https://blockworks.co/news/doj-trial-tornado-cash-roman-storm">disregard for regulatory alignment</a> undermines legal clarity and due process.



<h2 class="wp-block-heading">A warning for every DeFi dev</h2>



What happens when writing neutral, useful software tools becomes laden with risk? This verdict signals that simply publishing code could mean criminal liability — regardless of intent or control. Yes, it’s just one case, but this guilty verdict still will embolden prosecutors and intimidate developers.



Even more alarming: It exemplifies how jurisdiction is elastic. Peter Van Valkenburgh aptly calls SDNY “the sovereign District of New York,” capable of reeling in any dev, anywhere, if even a single user in Manhattan runs your code. This worry is no longer theoretical. Between Storm’s conviction and the Samourai Wallet developers’ recent plea deal, it’s a blueprint for future prosecutions unless the law is changed, or the interpretation repudiated.



<h2 class="wp-block-heading">DOJ’s approach: Unfair, hypocritical and dangerous</h2>



Let’s call it what it is: Prosecuting a developer who doesn’t touch users’ funds while letting large financial actors facing multi‑billion‑dollar laundering scandals skate by is hypocrisy.



Compared to world-scale financial scandals involving multinational banks, the criminal case against Storm is outrageous. In cases like <a href="https://www.bbc.com/news/topics/cm8m6leejrkt">the 1MDB scandal</a>, where over $4.5 billion was siphoned from Malaysia’s sovereign wealth fund with the help of major global financial institutions, few individuals faced meaningful criminal consequences.



Goldman Sachs, which helped underwrite billions in 1MDB bond sales, ultimately reached a deferred prosecution agreement with the DOJ in 2020. The bank <a href="https://www.reuters.com/markets/asia/goldman-sachs-its-role-multi-billion-dollar-1mdb-scandal-2023-10-12/">paid $2.9 billion in fines</a> but avoided criminal conviction, and no senior executives were charged. Only one former banker for Goldman’s Asia group, Roger Ng, <a href="https://www.theguardian.com/world/2023/mar/09/roger-ng-goldman-sachs-banker-malaysia-1mdb-fraud#:~:text=Roger%20Ng%2C%20the%20former%20Goldman,frauds%20of%20the%20past%20decade.">received</a> a prison sentence, and the DOJ closed the matter in 2024 without further indictments.



By contrast, Roman Storm&#8217;s role was limited to writing and deploying open-source smart contracts that others used, yet even on the lesser money-transmitter count, he faces up to a maximum of five years prison time. (Storm himself <a href="https://x.com/EleanorTerrett/status/1953146088602427664">sounded an optimistic note</a> following the verdict.)



Legal experts argue that this represents <a href="https://blockworks.co/news/appeals-court-dismiss-tornado-cash-suit">a double standard</a> in enforcement. “If you don&#8217;t handle other people’s money,” said Van Valkenburgh, “you shouldn&#8217;t be held to the same regulatory expectations as a bank like Credit Suisse or Goldman Sachs.”



The DOJ’s approach not only criminalizes innovation but diverts enforcement resources away from large-scale financial misconduct that poses far greater systemic risk. While traditional financial institutions routinely secure settlement deals for billion-dollar offenses, developers facing felony charges will think twice before publishing open-source tools that promote privacy and financial autonomy.&nbsp;



<h2 class="wp-block-heading">Political remedies needed</h2>



The Blockchain Regulatory Certainty Act (BRCA), now tacked onto the <a href="https://blockworks.co/news/us-house-passes-clarity-act">CLARITY market‑structure legislation</a>, would codify that non‑custodial developers are not money transmitters, aligned with the <a href="https://blockworks.co/tag/fincen">FinCEN</a> guidance. Van Valkenburgh describes it as a “really good simple statutory drafting exercise to clamp the brakes on this abuse of prosecutions.”



But even if that makes it through Congress — still a big if — CLARITY isn’t retroactive, so it won’t help Storm. Yet it can spare future developers.



“There’ll be a moment in a couple of months where it might be important to call your senator,” Van Valkenburgh said.



On the other side of the regulatory spectrum stands SEC Commissioner Hester Peirce. In <a href="https://www.sec.gov/newsroom/speeches-statements/peirce-remarks-blockchain-conference-080425">a speech this week</a>, she emphasized financial privacy as a constitutional right and warned against treating privacy‑protecting code as criminal. She reminded us: “Denying people financial privacy — whether through sweeping surveillance programs or restrictions on privacy‑protecting technologies — undermines the fabric and freedoms of our families, communities, and nation.”&nbsp;



Peirce also preached disintermediation — the idea that technology should obviate the need for intermediaries, and not add new mandates. She warned against deputizing private actors to surveil each other, saying it’s “antithetical to a free society.”&nbsp;



These principles directly clash with SDNY’s approach: criminalizing neutral tools that enhance one’s financial privacy. Peirce’s vision is of protecting, not policing, innovation.



Storm’s legal team is expected to challenge the conviction in the Second Circuit Court of Appeals, focusing on the misinterpretation of federal law. Key legal questions were foreclosed during <a href="https://blockworks.co/news/tornado-cash-motion-to-dismiss-denied">pretrial motions</a>, not left for the jury, Tuminelli said. “The jury was fenced in on the 1960 charge because they weren’t given the opportunity to really make the decision on the part that’s most relevant… the definition of money transmission,” she said.



The outcome of the appeal could have major implications for the crypto ecosystem. Coin Center is also supporting <a href="https://www.coincenter.org/app/uploads/2025/01/Lewellen-v.-Garland.pdf">a related civil lawsuit</a> in Texas.



The CLARITY Act, while offering no retroactive relief, could lessen the impact of Storm’s guilty verdict, clarifying that publishing noncustodial code alone can’t be treated as a criminal act. Without reform, every DeFi dev runs a risk.



Crypto can feel directionless at times. However, this is a clear fork in the road: What’s decided in the months ahead will shape the future of crypto development both in the United States and outside of it.



Let Tuminelli’s warning mobilize us, Peirce’s plea for privacy guide us, and Van Valkenburgh’s strategy direct us.&nbsp;



The legal battle isn’t over, and the political one is still in the early innings.



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Opinion: Tornado Cash developer conviction raises alarm for open-source devs

Casey Wagner

The jury in cryptocurrency mixer <a href="https://blockworks.co/tag/tornado-cash">Tornado Cash</a> developer Roman Storm’s criminal trial handed down a partial verdict Wednesday afternoon after four days of deliberation.&nbsp;



Storm was found guilty of conspiracy to operate an unlicensed money transmitter business. The jury was unable to reach a unanimous decision on the two other counts: conspiracy to commit money laundering and conspiracy to violate the IEEPA.&nbsp;



The jury deliberated for four days before coming to a decision on one of the counts. The government could opt to retry Storm on counts one and three.&nbsp;



The prosecution asked that Storm be remanded into custody, citing Storm’s “means” and ties to Russia, where he was born. The judge sided with the defense, determining Storm was not a flight risk and may remain out on bond.&nbsp;



The criminal trial, which spanned about three weeks, concluded last week with <a href="https://blockworks.co/news/roman-storm-closing-statements">lengthy summation arguments</a> from both the prosecution and defense. Storm did not testify during the trial.&nbsp;



Storm and co-developer Roman Semenov were <a href="https://www.justice.gov/usao-sdny/pr/tornado-cash-founders-charged-money-laundering-and-sanctions-violations">charged in 2023</a> with three federal counts. Semenov has not faced trial and is currently <a href="https://www.fbi.gov/wanted/wcc/roman-semenov">wanted</a> by the Federal Bureau of Investigations.&nbsp;



Throughout the trial, the government maintained that Storm, motivated by greed, intentionally helped illicit actors conceal funds through Tornado Cash.&nbsp;



“Tornado Cash made dirty money clean money, and made it impossible to tell the difference,” government attorney Benjamin Gianforti told the jury during his <a href="https://blockworks.co/news/roman-storm-closing-statements">closing statement</a> last week.&nbsp;



Storm’s team never denied that criminals used Tornado Cash, but they insisted that Storm had no criminal intent. Tornado Cash was created as a privacy tool for users who didn’t want their financial transactions made public, defense attorney Keri Axel said during opening statements.&nbsp;



Storm’s team did not immediately respond to Blockworks’ request for comment.&nbsp;



This is a developing story.



Correction note: Updated 8/6/2025 at 1:10 p.m. ET to reflect the jury decision on count 3. A previous version of this story incorrectly stated that Roman Storm was acquitted on count 3, conspiracy to violate the IEEPA. The jury was unable to reach a unanimous decision on this count.



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Tornado Cash developer found guilty on 1 count in partial verdict

The presentation portion of Roman Storm’s criminal trial came to a close Wednesday afternoon with the prosecution and defense each making their final pleas to the jury.&nbsp;



Both sides spent over 90 minutes on their closing arguments. The government opted to close with an additional 45-minute rebuttal. Attorneys on both sides focused on the same essential facts of the case, but urged the jury to come to different conclusions.&nbsp;



“This is a story about greed,” government attorney Benjamin Gianforti said at the beginning of his closing arguments. “It’s a story about helping criminals hide bags and bags of money.”&nbsp;



“Tornado Cash made dirty money clean money, and made it impossible to tell the difference,” he added.&nbsp;



The defense does not argue the truth of this second statement: they admit that criminals did use Tornado Cash for illicit activities, but this was never Storm’s intent in creating the software.&nbsp;



Storm created Tornado Cash to give users the ability to keep their financial transactions private, defense attorney David Patton told the jury.&nbsp;



“Did that also make it extremely useful to criminals? You bet it did,” Patton said.&nbsp;



The “privacy argument,” prosecutor Nathan Rehn said during the government’s rebuttal, is simply a “cover story.”&nbsp;



Storm not only knew criminals were using Tornado Cash to launder money, he supported them, Rehn argued.&nbsp;



The government presented messages to the jury in which Storm calls reports of hackers using Tornado Cash “advertising.” They also submitted photos of Storm and his co-developers wearing Tornado Cash T-shirts with images of a laundry machine.&nbsp;



These messages and photos are a mischaracterization, Patton later insisted. The shirts were a joke, and there are many communications that show Storm was not “celebrating hackers’ use of Tornado Cash.”&nbsp;



As for the prosecution’s claims that Storm “made millions” from Tornado Cash, the defense again maintained that this was a misleading portrayal of reality. The money Storm made came from selling the TORN token, which, Patton added, lost value when reports of criminals using Tornado Cash surfaced.&nbsp;



“They weren’t getting a cut” of money hackers laundered through Tornado Cash, nor did developers charge fees for using the software, Patton added.&nbsp;



After two weeks of witness testimony, jurors received charge instructions late Wednesday afternoon, the final step before the group heads to the deliberation room.



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Tornado Cash trial is now in the jury’s hands

Ben Strack

“Nothing further from the defense,” attorney Brian Klein told Judge Katherine Polk Failla yesterday afternoon at Manhattan’s Thurgood Marshall courthouse.



The team representing Tornado Cash co-founder Roman Storm had cycled through what remained of its witness list, and Storm chose not to take the stand.&nbsp;



A reminder that Storm is being charged with conspiracy to commit money laundering, conspiracy to commit sanctions violations, and conspiracy to operate an unlicensed money transmitting business.



His defense (and advocates of the privacy protocol) argue Storm isn’t criminally responsible for<a href="https://blockworks.co/news/treasurys-tornado-cash-sanctions-have-companies-stepping-back-from-users"> bad actors using</a> something he helped create.&nbsp;



Closing arguments were scheduled to begin at 9 a.m. “sharp” Wednesday — meaning in a matter of minutes (if you’re reading this when it publishes).&nbsp;



In the meantime, let’s go through Tuesday’s witnesses and some of the more memorable moments:



<h2 class="wp-block-heading">Guy Wuollet, partner at a16z crypto</h2>



Tuesday’s first witness, Wuollet had evaluated whether Andreessen Horowitz’s crypto/Web3 unit would invest in Tornado Cash in 2021.&nbsp;



In an email to Storm at the time, Wuollet wrote he was “impressed by the strength of the privacy” of Tornado Cash and “excited about the next iteration of the protocol.”



The reason a16z didn’t invest? Wuollet said the firm didn’t know if Tornado Cash would be profitable. “We will continue to be fans of Tornado Cash and to track its adoption onchain,” Wuollet added in the email.&nbsp;&nbsp;



When asked to acknowledge that crimes are committed on the blockchain, Wuollet paused before saying he thinks of it differently. “If someone robbed a store, I wouldn’t say the store was used in the crime.”



An attendee sitting to my left started laughing. The prosecution ended the cross-examination there.&nbsp;&nbsp;



<h2 class="wp-block-heading">Omid Malekan, Columbia Business School professor&nbsp;</h2>



Not on the stand long, Malekan said he used Tornado Cash in 2021 to purchase an Ethereum Name Service (ENS) name.&nbsp;



He used the protocol because he “didn’t want to put a bullseye on my back.”&nbsp;



The prosecution’s Ben Arad shouted out an objection. Failla asked Klein to control his witness.&nbsp;



<h2 class="wp-block-heading">Dr. Stephanie Hurder, founding economist of Prysm Group&nbsp;</h2>



We found out the defense has so far paid Hurder $120,000 for her time analyzing this case and being an expert witness. She reviewed Tornado Cash DAO proposals, TORN token price data, transactions on Etherscan, etc.&nbsp;



She countered several points previously brought up by the government about Tornado Cash’s supposed lack of decentralization. Hurder noted the protocol’s DAO was “well-designed and active” (55% of TORN tokens initially went to the DAO treasury) and that Tornado Cash founders did not have (or always use) their voting power on proposals.



She added that the founders did not have a direct hand in selecting entities on Tornado Cash’s relayer registry.



The government’s exchanges with Hurder were heated, with prosecutors getting her to acknowledge that bad actors have apparently used Tornado Cash to hide criminal proceeds. As we know, the case against Storm is more nuanced than that.&nbsp;



And in a reference to the vesting schedule for founders’ TORN tokens, a prosecutor asked: “Tornado Cash became less decentralized over time, right?”



Despite the government wanting only yes or no answers, Hurder got out: “The distribution of tokens became less decentralized. Yes.”



<h2 class="wp-block-heading">Dr. Matthew Green, computer science professor at Johns Hopkins University</h2>



Green, who helped create the <a href="https://www.researchgate.net/publication/286668243_Zerocash_Decentralized_Anonymous_Payments_from_Bitcoin">Zerocash</a> protocol, was brought in to emphasize the value of privacy.&nbsp;



Though he was intrigued with crypto and blockchain technology essentially from its outset, Green called the lack of privacy (i.e. public transactions) “a huge bug.”



He talked about the value of VPNs and credit-card tokenization in protecting individuals and institutions. At one point, I caught a juror dozing.



The Tornado Cash pools were immutable, Green confirmed — preventing hackers or founders from making changes there.&nbsp;&nbsp;



During the cross-examination, Arad asked Green whether the Tornado Cash website, user interface and relay registry could be changed. “Yes” to all three.



Also of note was Klein wanting Green to address the feasibility of a hypothetical user registry that one of the government’s witnesses, AnChain.AI’s Philip Werlau,<a href="https://blockworks.co/news/roman-storm-government-may-rest-case"> brought up last week</a>.&nbsp;



Green’s initial hesitation to respond and a subsequent sidebar with the judge meant that the question went unanswered.



But as this case winds down and the jury is charged, we’ll have other, more critical answers soon.&nbsp;



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Roman Storm trial: Witnesses play up Tornado Cash privacy, decentralization

The US government expects to rest its case against Tornado Cash co-founder Roman Storm on Thursday following yesterday’s anticipated testimony from an expert witness.



The defense is set to counter the prosecution’s efforts to show Storm could have better guarded against “bad actors” using Tornado Cash — the crypto mixer used for transaction privacy around which this case centers.



IRS Criminal Investigation special agent Stephan George took the stand to share findings that appeared to link a portion of the funds stolen from Hanfeng Lin to Tornado Cash.&nbsp;



Lin testified last week that a fraud recovery service told her to contact Tornado Cash about retrieving her funds. The defense was <a href="https://www.therage.co/tornado-cash-mistrial-hangfeng-lin/">reportedly</a> considering a mistrial motion after a subsequent witness, FBI Special Agent Joel DeCapua, didn’t link Lin’s funds to Tornado Cash — putting the relevance of Lin’s testimony in question.



But George said Wednesday he used public blockchain data — along with Chainalysis Reactor and TRM Labs — to find that a portion of Lin’s stolen funds that left Crypto.com ultimately went to Tornado Cash in November of 2021. 



He used an accounting method known as Last In, First Out (LIFO) — which assumes the disposal of crypto acquired most recently. When defense attorney Keri Axel challenged LIFO during cross-examination, George defended the method as a generally accepted accounting principle that the IRS “respects.”



Axel’s cross-examination of George was set to continue Thursday morning.&nbsp;&nbsp;



While the possibility of a mistrial was briefly mentioned in court Tuesday, the defense did not immediately comment about whether that’s still being considered.&nbsp;



&#8220;It&#8217;s usually not the situation that a trial is declared a mistrial merely because a witness&#8217;s testimony is not entirely germane,” Patrick Gruhn, a former partner at Crypto Lawyers LLC and FTX’s ex-head of Europe, told Blockworks. “Courts generally expect a lot more — egregious misconduct or prejudicial facts against the jury — before they suspend a trial.”



Though George linking Lin’s funds to Tornado Cash was an attempt by prosecutors to clear up a point of contention that arose, the charges against Storm go well beyond that.&nbsp;



At the heart of this case is whether Storm essentially helped criminals — such as North Korean state-sponsored hackers, The Lazarus Group — hide stolen funds, as the government alleges. He is charged with conspiracy to commit money laundering, conspiracy to commit sanctions violations, and conspiracy to operate an unlicensed money transmitting business.



Key questions of the case, as shared in opening statements last week, include whether Tornado Cash was immutable and if the developer is responsible for how software is used.



Defense attorney Keri Axel said in her opening statement: “It’s not a crime to make a useful thing that is misused.”



Read more: <a href="https://blockworks.co/news/roman-storm-trial-opening-statements">‘He lied’: US government makes opening plea to jury in Roman Storm trial</a>



After the jury left the courtroom on Wednesday afternoon, the prosecution told Judge Katherine Polk Failla that it had two witnesses remaining and could wrap up by Thursday morning.&nbsp;



Though the defense had not finalized its slate of witnesses before the court let out on Wednesday, Storm’s attorneys said they could rest their case as soon as Monday. Storm has not yet decided whether he will take the stand, they added.



“I assume you don’t have a hacker testifying,” Failla quipped. “That would be interesting.”&nbsp;



<h2 class="wp-block-heading">Hacker takes the stand</h2>



The prosecution did put a hacker on the stand on Tuesday. That was Shakeeb Ahmed, who is currently serving a three-year sentence after <a href="https://www.justice.gov/usao-sdny/pr/former-security-engineer-sentenced-three-years-prison-hacking-two-decentralized">pleading</a> guilty to computer fraud last year. Ahmed, a former technical lead in Amazon’s bug-bounty program, detailed how he stole $12 million worth of crypto from exchanges Crema and Nirvana in 2022.



He put his own funds into a Tornado Cash pool to “anonymize” them before using a third party — known as a relayer — to withdraw them. He then went on to hack the Crema exchange. He did not use Tornado Cash at any point leading up to, or after, he hacked the Nirvana exchange.



The defense, during cross-examination, made clear to the jury that Ahmed never put stolen funds into Tornado Cash.&nbsp;



“You didn’t use Tornado Cash for the [hack] proceeds?” defense attorney David Patton asked.&nbsp;



“Correct,” Ahmed said.



Patton also asked whether Ahmed ever communicated with Storm and the other Tornado Cash founders, or conspired with them to commit crimes.



“I did not,” Ahmed noted.



<h2 class="wp-block-heading">Questioning Tornado Cash’s design choice</h2>



The prosecution sought to establish, through another witness, that Storm — along with Tornado Cash co-founders Roman Semenov and Alexey Pertsev — could have made changes to the protocol to guard against bad actors using it.&nbsp;



The Office of Foreign Assets Control (OFAC) deemed the Lazarus Group responsible for the $625 million Ronin Bridge hack in March 2022 and sanctioned the entity. Tornado Cash <a href="https://x.com/TornadoCash/status/1514904975037669386">said</a> the following month that it was using a Chainalysis oracle contract “to block OFAC-sanctioned addresses from accessing the dapp.”



Philip Werlau, an investigator at AnChain.AI, testified that — while that blocked sanctioned entities from using Tornado Cash’s web application — founders did not implement this control for deposits made via its Command Line Interface (CLI).&nbsp;



“If there are two doors to a building and you only close one, you’re not preventing access,” Werlau said.



Werlau also explained how Tornado Cash could have maintained an offchain registry with users’ personal info collected through a username-password system.



Anticipating this testimony, defense attorneys noted to the judge earlier that day that while Tornado Cash could have been designed differently, that doesn’t mean what Storm built was illegal.



This sentiment came out during the cross-examination, when defense attorney Brian Klein raised his voice — asking Werlau if one reason to make pools immutable would be to make them less subject to hacks. That could reduce the ways a pool could be attacked, Werlau acknowledged.&nbsp;



Klein then asked Werlau if he provides personal info when he uses the Ethereum blockchain.



As Werlau paused to think, Klein rephrased, almost shouting: “There’s nothing like the registry you proposed, is there?”&nbsp;



“That is correct.”



Werlau, seemingly uncomfortable with the confrontation, looked up at the clock. A break for lunch was not far off.&nbsp;



<h2 class="wp-block-heading">The scene and the stakes</h2>



This writer sat 20 or so feet from Storm over the last two days, even passing him during breaks en route to the bathroom and elsewhere. The Tornado Cash founder appears calm, but walks with pace.



Sitting next to Axel on the courtroom’s left side, Storm often gazes toward the judge, stand and jury, stone-faced, blinking infrequently behind his glasses. Occasionally, he will scribble something on a Post-It and hand it to a member of his defense team. This writer did not once see Storm roll his eyes or shake his head.&nbsp;



Trial attendance ranged from roughly a dozen to two dozen people on Tuesday and Wednesday — meaning there are plenty of empty seats.&nbsp;



While not as high-profile a case as the Sam Bankman-Fried trial, Blockchain Association legal head Marisa Coppel noted its outcome will shape how developers, regulators and policymakers navigate the future of crypto innovation.



“A conviction could set a dangerous precedent by criminalizing the act of writing and publishing open-source code, amplifying fears among US developers and pushing innovation offshore,” she told Blockworks. “An acquittal, by contrast, may reaffirm that software creation alone isn’t a crime and could help restore confidence in building decentralized tools.”



Keep an eye on Blockworks for more <a href="https://blockworks.co/tag/roman-storm">Roman Storm trial updates</a>. 



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Hacker, IRS agent take Storm trial stand as government winds down case

Prosecutors and the defense team painted vastly different pictures of Tornado Cash developer Roman Storm’s motives and role during the second day of his criminal trial in Manhattan.&nbsp;



The government’s lead prosecutor Kevin Mosley said Storm helped criminals hide their dirty money. The crimes were intentional and Storm acted out of greed, he said during the opening remarks.



Plus, Mosley added, Storm lied to victims of hacks and scams, telling them there was nothing he could do to help them locate their stolen money.&nbsp;



Defense attorney Keri Axel, however, had a different narrative for the jury. Yes, there may have been some bad actors who used Tornado Cash for illicit purposes, but that’s not Storm’s fault.&nbsp;



“It’s not a crime to make a useful thing that is misused,” she said in her opening statement.&nbsp;



Tornado Cash was decentralized, Axel said, so Storm couldn’t have interfered if he wanted to, and besides, isn’t a tool that provides financial privacy a public service?&nbsp;



Read more: <a href="https://blockworks.co/news/tornado-cash-motion-to-dismiss-denied">Judge denies motion to dismiss case against Tornado Cash founder</a>



The opening statements underpin the underlying questions this case seeks to answer: Was Tornado Cash immutable, and is the developer responsible for how a software was used?&nbsp;



The government also focused much of its opening statement on who used Tornado Cash, specifically North Korean state-sponsored hackers, <a href="https://blockworks.co/news/bybit-hack-paradigm-samczsun-north-korea">the Lazarus Group</a>. The Treasury Department’s Office of Foreign Assets Control (OFAC) alleges this group used Tornado Cash to launder roughly $455 million of the $620 Axie Infinity/Ronin Bridge hack in March 2022.&nbsp;



In their opportunity to address the jury, the defense leaned heavily on Ethereum developer Vitalik Buterin’s relationship with Storm. Tornado Cash was designed with the intention of helping Ethereum users solve a “huge problem” associated with onchain transactions: privacy.&nbsp;



Read more: <a href="https://blockworks.co/news/on-the-margin-newsletter-tornado-cash">Judge rules Tornado Cash is not protected under the First Amendment</a>



Storm, who faces three federal charges, including conspiracy to commit money laundering, appeared calm during opening statements. He sat facing the jury with a straight face.&nbsp;



The jury, which was finalized Tuesday morning, consists of seven women and five men ranging in age from their 20s to 60s. One juror works as an IT manager and another works for Palantir, a software company with anti-terrorism and AI products.&nbsp;



The trial is expected to last 15 days in court, or roughly three weeks, according to attorneys on both sides.



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‘He lied’: US government makes opening plea to jury in Roman Storm trial

Katherine Ross

This is a segment from the Empire newsletter. To read full editions, <a href="https://blockworks.co/newsletter/empire" target="_blank" rel="noreferrer noopener">subscribe</a>.



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The Eleventh Circuit Court of Appeals signed off on a joint motion previously filed by both the Treasury Department and Coin Center to dismiss Coin Center’s appeal challenging the Tornado Cash sanctions.&nbsp;



It’s yet another sign of how far we’ve come, given that the government willingly removed those sanctions back in March. Attorneys for the government argued in the motion to dismiss that their willing decision made the case “moot.”



Now, while the government has clearly made strides in its acceptance of crypto, I should also point out that another case did help push it to make its decision.&nbsp;



Earlier this year, in a Western Texas court, a judge ruled that the “action is unlawful and is therefore set aside” and barred the government from enforcing the sanctions if they chose not to appeal (and that time period to appeal ended on June 28).&nbsp;



“The parties have conferred about the effect of these developments on this appeal. The government’s view is that OFAC’s rescission of the designation moots this appeal. Plaintiffs’ view is that this appeal will become moot after the Texas judgment becomes final and unappealable,” Coin Center and the government wrote in the motion.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">This is the official end to our court battle over the statutory authority behind the TC sanctions. The government was not interested in moving forward and defending their dangerously overbroad interpretation of sanctions laws. Thank you again to our co-plaintiffs:…&mdash; Peter Van Valkenburgh (@valkenburgh) <a href="https://twitter.com/valkenburgh/status/1942262643546292443?ref_src=twsrc%5Etfw">July 7, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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All of this is great, right? Years of court battles and money on lawyers have finally ended in outcomes that push crypto forward.&nbsp;



But the big catch is that this decision unfortunately doesn’t stop the trial proceeding against Tornado Cash’s founder, Roman Storm, which is set to start next Monday, July 14.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">To resolve any confusion, my criminal trial, led by the SDNY, is scheduled for July 14, 2025 <a href="https://t.co/C8nIVeyuEe">https://t.co/C8nIVeyuEe</a>&mdash; Roman Storm 🇺🇸 🌪️ (@rstormsf) <a href="https://twitter.com/rstormsf/status/1942327725991379155?ref_src=twsrc%5Etfw">July 7, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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Storm and his lawyers will have to prove to a jury that he didn’t knowingly create or operate a money-transmitting business when he and co-founder Roman Semenov wrote the code for Tornado Cash.



“The irrationality and unfairness of these charges cannot be overstated. The Treasury Department has long recognized that developers who publish software are not money transmitters,” Paradigm’s Katie Biber <a href="https://www.paradigm.xyz/2025/06/paradigm-files-amicus-brief-supporting-roman-storm">wrote</a> last month.&nbsp;



The stakes are high, she further argued, because this case could have lasting repercussions for developers in crypto.&nbsp;



So while we’re clearly making strides in the mass acceptance of crypto, it’s clear we still have a ways to go, and next week’s trial sets up a big battle. One that we all have to pay attention to.



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Appeals court grants motion to dismiss in Tornado Cash suit

This is a segment from the Empire newsletter. To read full editions, <a href="https://blockworks.co/newsletter/empire" target="_blank" rel="noreferrer noopener">subscribe</a>.



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The Department of Justice will continue its case against Tornado Cash’s Roman Storm.&nbsp;



Previously, the DoJ said it was going to reconsider, after an <a href="https://www.justice.gov/dag/media/1395781/dl?inline">internal memo</a> from Deputy Attorney General Todd Blanche said that the department would “stop participating in regulation by prosecution in this space.”



There was a slight change in the case, per the letter, which will drop the charge of Storm allegedly not complying with the money-transmitter business registration rules.&nbsp;



Storm now faces a trial, and the remaining charges are focused on money laundering.&nbsp;



ICYMI: Storm is one of the founders of <a href="https://blockworks.co/tag/tornado-cash">Tornado Cash</a>, which has had a <a href="https://blockworks.co/news/ny-fed-tornado-cash-report">bumpy road</a> with the US government (though it recently received a <a href="https://www.coindesk.com/policy/2025/04/29/tornado-cash-can-t-be-sanctioned-again-texas-judge-rules">court win</a> when a judge ruled it can’t be sanctioned again by the government). The DOJ initially <a href="https://blockworks.co/news/roman-semenov-tornado-cash-ofac-list">charged Storm</a> back in 2023 alongside his co-founder Roman Semenov. 



In the April memo from Blanche, he outright said that the DOJ will focus its cases on the bad actors who are using the various platforms, rather than the platforms or the developers themselves.&nbsp;



Here’s Blanche’s direct quote: “The Department will pursue the illicit financing of these enterprises by the individuals and enterprises themselves, including when it involves digital assets, but will not pursue actions against the platforms that these enterprises utilize to conduct their illegal activities.”



The DeFi Education Fund noted that the dropped charge is “consistent” with the April memo.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Today, the DOJ filed notice it is dropping the Section 1960(b)(1)(B) charge against <a href="https://twitter.com/rstormsf?ref_src=twsrc%5Etfw">@rstormsf</a> in U.S. v. Roman Storm, but will continue to trial on other charges. While this was consistent with an April 2025 DOJ Memo, calling for the end to “regulation by prosecution” and for the… <a href="https://t.co/STDP2xXzP2">pic.twitter.com/STDP2xXzP2</a>&mdash; DeFi Education Fund (@fund_defi) <a href="https://twitter.com/fund_defi/status/1923100662147035538?ref_src=twsrc%5Etfw">May 15, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



It seems that, even with the changes, this potential trial sets up a tricky situation — with the US just opening up, is there a possible precedent set legally that could impact developers?&nbsp;



Potentially.



Variant Fund’s Jake Chervinsky said in a post on X that the case “should end, period.”



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">DOJ clearly ordered the end of regulation by criminal enforcement in crypto. But SDNY dropped only one of many inappropriate charges against Roman Storm. Like spitting in DOJ’s face. This is why people call it the Sovereign District of New York. The case should end, period. <a href="https://t.co/JXdJSg7aDf">https://t.co/JXdJSg7aDf</a>&mdash; Jake Chervinsky (@jchervinsky) <a href="https://twitter.com/jchervinsky/status/1923113075139322090?ref_src=twsrc%5Etfw">May 15, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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Back in April, Paradigm chief legal officer Katie Biber <a href="https://x.com/katiebiber/status/1914392536795455822">wrote</a>, “If developer liability is unlimited and tied to the conduct of unknown third parties, no developers will want to build in America. It destroys the innovation economy here and ships crypto, AI &amp; all nascent tech offshore.”



DEF, in another post, said that the case moving forward with the current charges means that the prosecutors are arguing that Storm “‘[transferred] funds on behalf of the public,’ pursuant to 1960(b)(2), which means the accused must have custody and control over other people’s funds.”



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">In short, the DOJ will continue with its illogical and unlawful theory of money transmission. For any Section 1960 charge, the accused must be “transferring funds on behalf of the public,” pursuant to 1960(b)(2), which means the accused must have custody and control over other…&mdash; DeFi Education Fund (@fund_defi) <a href="https://twitter.com/fund_defi/status/1923100664881942651?ref_src=twsrc%5Etfw">May 15, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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“That is plainly not the case with software devs of noncustodial p2p protocols, and under any fair reading of the law, both charges should be dismissed,” DEF continued.&nbsp;



So now Storm heads to trial, and this could be a very important one to keep an eye on for the space.&nbsp;



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