The high-stakes Tornado Cash trial, closely watched by the cryptocurrency and privacy software development communities, concluded with a guilty verdict for co-founder Roman Storm on one of the three charges he faced. This outcome has significant implications for developers of noncustodial Bitcoin and crypto technology, as well as privacy-preserving software, raising questions about legal precedents and future innovation in the sector.

Amanda Tuminelli, executive director and chief legal officer for the DeFi Education Fund, provided crucial insights into the legal framework surrounding the case, particularly concerning 18 U.S. Code § 1960, the federal law prohibiting the operation of an unlicensed money transmitting business. Tuminelli argued that Storm had not violated this statute in creating and operating Tornado Cash, a crypto mixing service built on Ethereum. She also highlighted the importance of proposed legislation like the CLARITY Act and the Blockchain Regulatory Certainty Act (BRCA), which aim to protect developers of non-controlling (noncustodial) crypto technology from requiring money transmitting licenses and being subject to existing money transmission laws. The Department of Justice's (DoJ) shift away from its 2019 FinCEN guidance, despite a memo from U.S. Deputy Attorney General Todd Blanche indicating a move away from targeting virtual currency mixing services, was also a point of concern for its potential to stifle innovation.

On August 6, 2025, in the Southern District of New York (SDNY), a jury found Roman Storm guilty on the second count of his indictment: conspiracy to operate an unlicensed money transmitting business. The jury 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, reached after three and a half days of deliberation following a trial that commenced mid-last month, now subjects Storm to a potential sentence of up to five years in prison.

Following the verdict, the prosecution motioned to remand Storm into custody, asserting he was a flight risk. However, Judge Failla rejected this motion. The defense, through Ms. Klein, successfully argued against the claim, citing Storm's strong ties to the U.S., including his home tied to a $2 million bail bond, his daughter and girlfriend residing in the U.S., his parents being green card holders, and significant support from the U.S.-based crypto community. Judge Failla acknowledged that Storm's incentives had shifted but emphasized that the