Roman Storm Guilty of Unlicensed Money Transmitting Conspiracy in Partial Verdict
Roman Storm, a developer of the cryptocurrency mixing service Tornado Cash, has been found guilty on one count of conspiring to operate an unlicensed money transmitting business. This verdict, reached by a Manhattan jury on Wednesday, follows a three-week trial and four days of deliberations. The jury, however, failed to reach a unanimous decision on the remaining charges: conspiracy to commit money laundering and conspiracy to violate international sanctions. Prosecutors have indicated they will internally review the case before deciding whether to pursue a retrial on these hung counts.
Storm’s arrest in 2023 stemmed from allegations that he aided hackers, including North Korea’s Lazarus Group, in laundering over $1 billion through Tornado Cash. Following the verdict, prosecutors sought to have Storm remanded to prison pending sentencing, citing concerns about his Russian origins (although he is a U.S. citizen who has lived in the U.S. for over a decade), alleged assistance to others in immigration fraud, and his financial capacity to flee. However, Judge Katherine Polke Failla of the Southern District of New York (SDNY) denied this motion, reasoning that Storm’s conviction on only one count, coupled with his substantial bail and strong family ties in the U.S., did not constitute a flight risk. She also noted his likely intention to appeal.
The DeFi Education Fund, a supportive organization, expressed its disappointment with the hung jury on the remaining charges, highlighting the flawed principle of holding software developers responsible for third-party misuse of their code. They criticized the prosecution’s approach and urged against a retrial. The organization plans to continue supporting Storm’s fight against the money transmitting conviction, which they deem fundamentally flawed. The verdict comes a week after the developers of Samourai Wallet, a similar privacy tool, pleaded guilty to a similar charge after a plea bargain. This case raises significant questions about the legal ramifications of developing privacy-focused cryptocurrency tools and the challenges of prosecuting cases involving complex financial transactions and international actors.
