On August 6, 2025, a jury in the Southern District of New York delivered a mixed verdict in the high-profile criminal trial of Roman Storm, the founder of Tornado Cash. Tornado Cash is a decentralized, open-source cryptocurrency “mixer” designed to give users privacy by pooling funds and obfuscating transaction trails. Although Storm was convicted on one count—conspiracy to operate an unlicensed money transmitting business—the jury deadlocked on more severe charges related to money laundering and evasion of U.S. sanctions.

The government’s case hinged on the claim that Storm knew criminal actors were exploiting Tornado Cash to conceal illicit gains, including money linked to the North Korean Lazarus Group. Prosecutors argued that privacy was used as a cover story, and that Storm and his co-founders actively prioritized profits over safeguards, making only minimal efforts to prevent illegal activity.

The defense countered that Tornado Cash is fundamentally a privacy tool, serving legitimate market needs just like secure messaging apps or VPNs. They stressed that most platform usage was lawful and argued that Storm could not be held criminally liable simply because the platform could be misused by third parties. The defense also pointed to attempted safeguards like geo-blocking as evidence of diligence.

After nearly a week of jury deliberations, Storm’s conviction on the unlicensed business charge left the broader questions unresolved: can developers of privacy-preserving crypto technologies be held personally responsible for illicit uses facilitated by their code?

Meanwhile, the legal landscape around Tornado Cash shifted dramatically in 2025. Earlier that year, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) reversed its earlier position and officially lifted sanctions on Tornado Cash. This move came after increasing legal challenges and criticism that regulators had exceeded their authority. As a result, related litigation was dismissed, and the crypto industry viewed the decision as a potential win for privacy advocates and developers.

The Tornado Cash trial illustrates the growing tension between regulatory efforts to combat financial crime and the fundamental principle of technological neutrality in decentralized finance. As the case heads toward appeal, developers, privacy advocates, and regulators will closely watch how courts continue to interpret liability, intent, and the limits of government oversight in a rapidly evolving crypto environment.