Roman Storm’s conviction in the Tornado Cash case marks a pivotal moment in the clash between crypto innovation and regulation. Found guilty of unlicensed money transmitting conspiracy, Storm’s case raises serious questions about the future of privacy-focused tools in blockchain, the boundaries of developer responsibility, and how regulators will address money laundering concerns within decentralized finance.
NEW YORK — Roman Storm, the developer of Tornado Cash, has been found guilty by a Manhattan jury on charges of conspiring to operate an unlicensed money transmitting business, marking a significant moment in the evolving landscape of cryptocurrency regulation and enforcement.
Despite the conviction, the jury was unable to reach a unanimous verdict on additional serious charges, including conspiracy to commit money laundering and conspiracy to violate international sanctions. After four days of deliberations following a detailed three-week trial, these charges remain unresolved, and the sentencing date has yet to be set. Prosecutors have indicated that they will internally decide whether to re-try Storm on these outstanding counts.
Storm was arrested in 2023 amid allegations that he facilitated hackers and cybercriminals—including North Korea's notorious Lazarus Group—to launder over $1 billion in illicit funds using Tornado Cash, a crypto privacy tool he developed. This case places a spotlight on the complex issues of money laundering conspiracy intertwined with unlicensed money transmitting activities within the crypto sphere.
Following the verdict, prosecutors promptly moved to have Storm, who is currently out on bail, remanded to prison pending sentencing. They argued that, despite Storm being a U.S. citizen who has lived in Seattle for over a decade, his origins from Kazakhstan and alleged advice on circumventing immigration systems posed a flight risk. Additionally, they cited his significant financial resources as a concern for potential flight.
Storm’s defense countered effectively, with lawyer Keri Axel from Waymaker emphasizing his deep family ties to the U.S., including joint custody of his five-year-old daughter and strong connections to extended family in California. He has also surrendered his passport. District Judge Katherine Polke Failla of the Southern District of New York sided with the defense, concluding that Storm is not a flight risk and is likely to remain to pursue an appeal.
Judge Failla stated, "He may appeal, he has every incentive to stay and fight. He is not a risk of flight, given the size of the bond. There is a lot of fighting left in this case before sentencing, and I think Mr. Storm will stay for it."
This partial verdict in Storm’s trial occurs as regulators and prosecutors continue to clamp down on unlicensed money transmitting operations and money laundering conspiracies within the burgeoning crypto industry.
In a related development, developers of Samourai Wallet, a Bitcoin privacy tool akin to Tornado Cash, recently pleaded guilty to conspiracy to operate an unlicensed money transmitting business. This plea followed negotiations that resulted in the dismissal of heavier money laundering conspiracy charges, underscoring the legal strategies employed in such cases.
The Roman Storm case is emblematic of the increasing scrutiny on technology that enables privacy but may also facilitate illicit transactions. The intersecting issues of money laundering conspiracy and operating an unlicensed money transmitting business are challenging regulators globally, requiring nuanced enforcement and technological understanding.
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