The fate of Roman Storm, co-founder of the cryptocurrency mixing service Tornado Cash, now rests in the hands of a jury after closing arguments concluded on Wednesday in the Southern District of New York. Storm faces charges of conspiracy to launder money, violating US sanctions, and operating an unlicensed money-transmitting business. If convicted on all three counts, he could face a prison sentence of over 40 years.
Prosecutors claim that Storm conspired to launder money through Tornado Cash, calling it a "fancy online money launderer" whose business model centered around providing privacy for criminals. Assistant US Attorney Ben Gianforti argued that Storm was guilty of "hiding dirty money," running "an illegal transmitting business," and violating sanctions against North Korea and the Lazarus Group. Gianforti highlighted instances where Tornado Cash was allegedly used after major security breaches, such as the KuCoin and Ronin hacks, claiming the platform transferred $350 million from a sanctioned Lazarus wallet after sanctions were imposed.
The defense, led by Keri Curtis Axel, contends that Storm had no control over the crypto deposited into Tornado Cash and that the platform merely facilitated private crypto transactions. Axel argued that hackers could access Tornado Cash pools at any time, and no one could stop them. She also stated that Storm had no knowledge of any illicit operations conducted through the mixer and did not communicate with any criminals who used it. The defense maintains that Tornado Cash was a legitimate tool and that Storm did not intentionally facilitate criminal activity.
The trial has brought to the forefront the debate about the responsibility of developers for decentralized software that is used illegally. Marisa Coppel, legal head at the Blockchain Association, noted that the trial's outcome will significantly shape how developers, regulators, and policymakers navigate the future of crypto innovation. A conviction, she stated, could set a dangerous precedent by criminalizing the act of writing and publishing open-source code, amplifying fears among US developers and potentially pushing innovation offshore. Conversely, an acquittal could reaffirm that software creation alone isn't a crime and could help restore confidence in building decentralized tools.
During the trial, an IRS Criminal Investigation special agent testified, presenting findings that appeared to link funds stolen from Hanfeng Lin to Tornado Cash. Additionally, a hacker who stole $12 million worth of crypto from exchanges Crema and Nirvana in 2022 described how he used Tornado Cash to "anonymize" his funds. However, during cross-examination, the defense clarified that the hacker never deposited stolen funds into Tornado Cash. The prosecution also sought to establish that Storm and his co-founders could have implemented changes to the Tornado Cash protocol to prevent its use by bad actors. Tornado Cash, at one point, stated it was using a Chainalysis oracle contract to block OFAC-sanctioned addresses from accessing the dapp.
The jury has received final instructions from the judge and has begun deliberations. The verdict will have significant implications for the cryptocurrency industry, particularly for developers of decentralized finance (DeFi) tools and the broader issue of regulatory oversight in the crypto space.
