As the July 14th criminal trial of Tornado Cash co-founder Roman Storm approaches, Judge Katherine Failla has indicated a reluctance to allow any mention of the 2022 sanctions against the cryptocurrency mixing service in court. This development occurred during a final conference before the trial, where Judge Failla focused on pretrial motions concerning the evidence and arguments that can be presented in the case.
Storm, along with Roman Semenov, is accused of operating Tornado Cash, which allegedly laundered over $1 billion in criminal proceeds. The Justice Department maintains that Storm and Semenov knowingly facilitated this money laundering, even as they publicly claimed to offer a sophisticated privacy service. The charges include conspiracy to commit money laundering and conspiracy to violate the International Emergency Economic Powers Act (IEEPA), each carrying a maximum sentence of 20 years in prison. Semenov remains at large.
The potential barring of sanctions-related evidence stems from ongoing legal debates about the U.S. Treasury Department's authority to sanction decentralized technologies like Tornado Cash. In March 2025, the Treasury Department lifted sanctions against Tornado Cash following a court ruling that immutable smart contracts cannot be considered property subject to sanctions. A federal judge in Texas further ruled that OFAC's sanctioning of Tornado Cash was illegal, prohibiting it from relisting the privacy tool in the future. This decision was influenced by a previous ruling from a three-judge panel that the national security legislation cited to support the sanctions covered only people and corporate entities, not software. The court recognized that Tornado Cash, as a decentralized software, is not a person or entity.
Judge Failla expressed concern that discussing OFAC's sanctions against Tornado Cash could confuse the jury. Storm’s legal team preferred to exclude the sanctions from witness testimony and closing arguments. Prosecutors, however, argued that it would be challenging to present key evidence, such as Storm’s alleged behavior after the initial sanctions, without mentioning the sanctions themselves. This evidence includes Google searches, the sale of $12 million worth of TORN tokens, and the transfer of control of Tornado Cash to a decentralized entity.
In a related decision, Judge Failla ruled that the verdict in the Van Loon vs. Department of the Treasury case would not be discussed during Storm's trial. The Van Loon case involved the Treasury Department's Office of Foreign Asset Control's (OFAC) ability to sanction Tornado Cash.
The government's case also hinges on the allegation that Tornado Cash facilitated money laundering for the Lazarus Group, a North Korean state-sanctioned hacking group. Judge Failla urged both the defense and prosecution to limit their references to North Korea's weapons of mass destruction (WMD) program.
Despite the vacating of sanctions, the Department of Justice has decided to maintain charges against Roman Storm. The DOJ specified that Storm will be tried primarily for conspiracy to commit money laundering and conspiracy to violate U.S. sanctions. Storm's attorneys have argued that prosecutors failed to disclose 2023 communications with the Financial Crimes Enforcement Network (FinCEN), which allegedly indicate that non-custodial crypto mixers like Tornado Cash do not qualify as “money transmitting businesses” under federal law.
The trial is anticipated to extend for a full month and is expected to be one of the most significant in the history of the crypto ecosystem, potentially setting key precedents regarding the legal liability of developers in the world of decentralized technology.
