Tornado Cash co-founder Roman Storm dismissal bid rejected by US prosecutors
US prosecutors have rejected Tornado Cash co-founder Roman Storm’s request for acquittal. In a Tuesday filing to the US District Court for the Southern District of New York, Jay Clayton argued Storm’s alleged criminal use of Tornado Cash was “window dressing” or “outright misdirection,” dismissing Storm’s attempt to borrow reasoning from a civil copyright case.
Storm’s lawyers had said they would rely on a 2026 Supreme Court decision, Cox Communications, Inc. v. Sony Music Entertainment, to challenge prosecutors’ claims about his intent. Clayton said the Tornado Cash conduct “bears no resemblance” to Cox, noting that a civil copyright dispute is irrelevant to the criminal allegations.
Key charges stem from a partial 2025 jury outcome. Last August, a jury convicted Storm of conspiracy to operate an unlicensed money transmitting business, but deadlocked on two counts: conspiracy to commit money laundering and conspiracy to violate sanctions. This leaves open the possibility of a retrial.
Clayton added there was no evidence Storm implemented effective anti-money-laundering measures. A judge is considering an October retrial, but as of Tuesday no date had been set.
The wider context: Storm has argued that the Justice Department’s approach reflects “regulation by prosecution,” citing DOJ acting head Todd Blanche’s April 2025 memo. The parties are scheduled to meet Thursday as prosecutors press for continued proceedings on the two deadlocked counts, which Storm says could mean up to 40 years in federal prison.
Neutral
This is a legal/procedural development tied to Tornado Cash and Roman Storm. While it can keep regulatory and enforcement risk elevated for privacy/mixing-related projects, the article does not introduce new protocol changes or liquidity shocks to specific tokens. In the short term, traders may see mild sentiment pressure because the case can still move toward an October retrial and the potential for lengthy sentences, which often fuels “compliance risk” narratives.
However, the impact is likely limited because market pricing usually reacts more to direct, near-term catalysts (exchange listings/delistings, major stablecoin events, or large-scale asset freezes). Similar enforcement-focused headlines in past cycles have tended to be absorbed by the market unless accompanied by concrete restrictions. Long term, ongoing courtroom arguments about developer/code liability could affect how builders assess jurisdictional risk, but that influence typically plays out gradually rather than causing immediate volatility.
Overall, the news can slightly affect sentiment around privacy tooling and sanctions compliance, but it is not a direct fundamental driver for broad market stability.