Tornado Cash: Roman Storm Convicted for Unlicensed Service

Roman Storm, co-founder of Tornado Cash, was convicted on August 6 of conspiracy to operate an unlicensed money transmitting service, marking the first U.S. conviction in the Tornado Cash case. The jury deadlocked on charges of conspiracy to commit money laundering and violating North Korea sanctions, effectively acquitting him on those counts. He faces up to five years in prison at a sentencing hearing later this year. Prosecutors’ bid to revoke his $10 million crypto-backed bail was denied by Judge Katherine Polk Failla, who cited Storm’s compliance and U.S. family ties. Supporters have raised over $3 million for his defense, reflecting the industry’s split over DeFi privacy tools. The mixed verdict underscores escalating regulatory scrutiny of decentralized finance (DeFi) platforms and privacy mixers. U.S. authorities argue Tornado Cash enables money laundering, while advocates warn that aggressive oversight could stifle innovation and user privacy. Traders should monitor potential compliance mandates for DeFi protocols and shifting enforcement trends, particularly around Tornado Cash and privacy-focused tokens. In the short term, the verdict may dampen sentiment for privacy coins, but it also clarifies legal risks for mixer services. Long-term implications include possible new DeFi regulations or intensified enforcement actions. Crypto traders must watch for DOJ retrial decisions and evolving regulatory frameworks that could reshape market structures and trading strategies.