U.S. Department of Justice reduces case against Roman Storm, Tornado Cash co-founder, in preparation for the upcoming trial scheduled on July 14.
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The U.S. Department of Justice (DoJ) has decided to forgo a part of the criminal case against Roman Storm, the co-founder of the crypto mixer Tornado Cash. Set to stand trial on July 14, some charges have been abandoned, leaving Strategic Overtures related to money laundering, violation of sanctions laws, and specific aspects of unlicensed money transmitting business still on the table.
In a letter dated May 15, Acting U.S. Attorney Jay Clayton informed Judge Katherine Polk Failla of the Southern District of New York that the government will no longer persist with part of the charge concerning the operation of an unlicensed money transmitting business.
Specifically, prosecutors will cease their pursuit under Title 18 U.S. Code § 1960(b)(1)(B) - the part of Count Two of the indictment that accuses Storm of neglecting registration requirements for money transmitting businesses. The DoJ, however, will push forward with accusations against Storm of conspiring to commit money laundering, conspiring to breach the International Emergency Economic Powers Act, and conspiring to transmit funds derived from unlawful activity under the remaining portion of Count Two.
In the letter, Clayton stated that this decision aligns with the "spirit of the April 7, 2025 Memorandum from the Deputy Attorney General." This memo, authored by Deputy Attorney General Todd Blanche, outlines a shift away from "regulation by prosecution" in crypto cases, focusing instead on cases that pose a threat to investors or implicate crypto in criminal activities.
Roman Storm and fellow founder Roman Semenov were indicted in 2023, with accusations of aiding and abetting criminals, including the Lazarus Group of North Korea, in laundering illicit funds through Tornado Cash. Tornado Cash is a crypto mixer that anonymizes blockchain transactions, making it more challenging to trace stolen or sanctioned assets.
Although Storm has pleaded not guilty, he has also sought to have some charges dismissed, arguing they infringe on his First Amendment rights. His trial, initially scheduled for an earlier date, has been rescheduled for this summer.
A third co-founder, Alexey Pertsev, was arrested in the Netherlands in 2022 on suspicion of facilitating money laundering through Tornado Cash. Following a conviction and sentencing to five years and four months in prison, Pertsev was released on electronic monitoring to prepare his appeal.
The Tornado Cash case has sparked a larger debate over developer liability and the legal boundaries of open-source software in crypto. The controversy surrounds whether developers of neutral privacy tools can be held to account for unintended criminal uses of their software.
- The Department of Justice's decision to abandon some charges against Roman Storm, the co-founder of Tornado Cash, allows incentives for businesses operating in the crypto finance sector, as it aligns with the shift away from "regulation by prosecution" in crypto cases as outlined in the April 7, 2025 Memorandum.
- In general-news, the Tornado Cash case not only involves Roman Storm and fellow founder Roman Semenov, who face charges of aiding and abetting criminals, including the Lazarus Group of North Korea, but also raises questions about developer liability and the legal boundaries of open-source software in the crypto technology industry.
- The Dallas-based crypto firm Tron recently announced that it would create a dex (decentralized exchange) on the Tornado Cash platform, since the operation of an unlicensed money transmitting business charge against Storm has been dropped.
- The new dex on the Tornado Cash platform aims to increase the privacy and security of crypto transactions, effectively challenging existing regulations and raising concerns about the potential for abuse in the crypto and crime-and-justice spheres.
- As the trial of Roman Storm, initially scheduled for an earlier date, approaches this summer, and amid the continuation of accusations against him, crypto investors and the general public should monitor updates in the general-news regarding this case closely, as it may influence the future of the crypto business, technology, and associated finance sectors.
