Roman Storm, co-founder of the cryptocurrency mixer Tornado Cash, has been found guilty on one count of his indictment: conspiracy to operate an unlicensed money transmitting business. This verdict, delivered in the Southern District of New York (SDNY), concludes the high-profile Tornado Cash trial. The jury reached this decision after three and a half days of deliberation, following a trial that commenced in the middle of the previous month. As a direct consequence of this conviction, Storm now faces a potential prison sentence of up to five years.

Interestingly, the jury did not achieve a unanimous verdict on the two other charges brought against Storm, which included conspiracy to commit money laundering and conspiracy to violate sanctions. This indicates a nuanced outcome where the jury was convinced of his involvement in operating an unlicensed money transmission service but could not agree on the more severe allegations.

Following the issuance of the verdict, the prosecution immediately moved to remand Storm into custody, arguing that he posed a flight risk. However, Judge Failla firmly rejected this motion. Ms. Klein, representing the defense, vigorously countered the prosecution's claims, highlighting several factors that mitigated any flight risk. She emphasized that Storm's home in Washington state was tied up in a substantial $2 million bail bond, that his daughter (with whom he shares partial custody) and his girlfriend reside in the U.S., and that his parents are green card holders. Furthermore, the defense pointed out that a significant portion of the crypto community that has supported Storm throughout his legal battle is based in the U.S. and is expected to continue their support as he pursues an appeal of the verdict.

While the prosecution contended that the conviction itself provided Storm with increased incentive to flee, Judge Failla remained unconvinced. She articulated that the “stability of the verdict is still in play,” likely referring to the strong possibility of an appeal, and acknowledged that his “incentives have shifted tremendously,” but ultimately denied the motion to remand him, allowing Storm to remain free on bail pending sentencing or appeal.

Shortly after the verdict, U.S. Attorney for the SDNY, Jay Clayton (a former U.S. Securities and Exchange Commission chair), issued a statement. Clayton asserted, “Roman Storm and Tornado Cash provided a service for North Korean hackers and other criminals to move and hide more than $1 billion of dirty money.” He further added that while the speed, efficiency, and functionality of stablecoins and other digital assets offer great promise, this promise “cannot be an excuse for criminality.” Clayton emphasized the commitment of his office and partner agencies to hold accountable those who exploit emerging technologies for criminal purposes, stating, “Criminals who use new technology to commit age old crimes, including hiding dirty money, undermine the public trust, and unfairly cast a shadow on the many innovators who operate lawfully.” Notably, Clayton’s statement did not reference a memo from U.S. Deputy Attorney General Todd Blanche, which had indicated that the U.S. Department of Justice would cease “participating in regulation by prosecution” in the crypto space and would no longer target virtual currency mixing services solely for the actions of their end users. Additionally, Clayton did not address the point that the vast majority of funds processed through Tornado Cash users were not definitively proven to have been obtained illicitly.