The high-stakes Tornado Cash trial, focusing on its implications for developers of noncustodial Bitcoin and crypto technology as well as privacy-preserving software, has concluded with a significant verdict. Amanda Tuminelli, executive director and chief legal officer for the DeFi Education Fund, provided expert insight into the proceedings, highlighting the charges against Tornado Cash co-founder Roman Storm and the broader legal landscape surrounding cryptocurrency services.

Tuminelli meticulously broke down the three charges levied against Storm, with a deep dive into the conspiracy to operate an unlicensed money transmitting business charge. She is an expert on 18 U.S. Code § 1960, the U.S. federal law prohibiting the operation of an unlicensed money transmitting business. In her analysis, Tuminelli contended that Storm had not violated this statute in creating and operating Tornado Cash, an Ethereum-based crypto mixing service.

Furthermore, Tuminelli discussed legislative efforts like the CLARITY Act and the Blockchain Regulatory Certainty Act (BRCA). Both acts contain language designed to protect developers of “non-controlling” (noncustodial) crypto technology, stipulating that such developers and purveyors do not require a money transmitting license and should not be subject to existing money transmission laws. She also expressed concern that the Department of Justice’s (DoJ) shift away from 2019 FinCEN guidance threatens innovation in the crypto space, potentially leading to continued prosecution of developers like Storm, despite an April memo from U.S. Deputy Attorney General Todd Blanche indicating the DoJ would cease targeting crypto entities, including mixing and tumbling services, for the acts of their end users. The DeFi Education Fund actively supported the defense, submitting amicus briefs for both the Tornado Cash and Samourai Wallet cases, though the former was rejected by the court.

Ultimately, Roman Storm was found guilty today in the Southern District of New York (SDNY) on the second count of his indictment: conspiracy to operate an unlicensed money transmitting business. This verdict was reached after three and a half days of jury deliberation, following a trial that commenced in the middle of last month. 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. As a consequence of the guilty verdict on the money transmission charge, Storm now faces a potential prison sentence of up to five years.

In the wake of the verdict, the prosecution motioned to remand Storm into custody, asserting he was a flight risk. However, Judge Failla rejected this motion. The defense, represented by Ms. Klein, argued against the claim, citing Storm's deep ties to the United States: his home in Washington state is secured by a $2 million bail bond, his daughter (of whom he has partial custody) and girlfriend reside in the U.S., his parents are green card holders, and a significant portion of his supporting crypto community is based domestically and is expected to aid his appeal. While the prosecution argued that a conviction increased Storm's incentive to flee, Judge Failla was unconvinced, noting that the