The Tornado Cash trial, a high-stakes legal proceeding with profound implications for developers of noncustodial Bitcoin and crypto technology, as well as privacy-preserving software, recently concluded. The case centered around Roman Storm, co-founder of the Ethereum-based crypto mixing service, Tornado Cash, facing multiple charges from the U.S. government.

Ahead of the trial's conclusion, Amanda Tuminelli, executive director and chief legal officer for the DeFi Education Fund, offered a comprehensive overview of the legal landscape. Tuminelli, an expert on 18 U.S. Code § 1960—the federal law prohibiting the operation of an unlicensed money transmitting business—argued that Storm had not violated this statute in creating and operating Tornado Cash. She highlighted the critical distinction between operating a money transmitting business and developing non-controlling, noncustodial crypto technology.

Further legislative efforts, such as the CLARITY Act and the Blockchain Regulatory Certainty Act (BRCA), were also discussed by Tuminelli. Both bills contain language designed to protect developers of non-controlling crypto technology, stipulating that they should not require a money transmitting license nor be subject to existing money transmission laws. Tuminelli also voiced concerns regarding the Department of Justice’s (DoJ) perceived shift away from 2019 FinCEN guidance, suggesting it threatens innovation in the crypto space and could lead to continued prosecution of developers like Storm, despite an April memo from U.S. Deputy Attorney General Todd Blanche indicating a halt to targeting crypto entities for end-user actions.

The trial culminated in a guilty verdict for Roman Storm on the second count of his indictment: conspiracy to operate an unlicensed money transmitting business. The jury, however, did not reach a unanimous verdict on the other two counts, which included conspiracy to commit money laundering and conspiracy to violate sanctions. This guilty verdict was delivered after three and a half days of deliberation, following a trial that commenced in mid-July. As a consequence of this conviction, Storm now faces a potential prison sentence of up to five years.

Following the verdict, the prosecution motioned to remand Storm into custody, asserting he was a flight risk. However, Judge Failla rejected this motion, with the defense successfully arguing that Storm had little incentive to flee given his significant ties to the United States. These ties included a $2 million bail bond linked to his Washington state home, his daughter and girlfriend residing in the U.S., his parents being green card holders, and the substantial support from the U.S.-based crypto community, which is expected to continue during his appeal.

Shortly after the verdict, U.S. Attorney for the Southern District of New York, Jay Clayton, issued a statement. Clayton accused Roman Storm and Tornado Cash of providing a service that enabled