Despite a recent internal policy shift discouraging aggressive enforcement in regulatory gray zones, the U.S. Department of Justice has confirmed it will move forward with its criminal case against Roman Storm, co-founder of the crypto privacy protocol Tornado Cash.
In a court filing Thursday, federal prosecutors stated that Storm will stand trial in Manhattan on charges of conspiring to launder money, evade U.S. sanctions, and knowingly transmit funds derived from criminal activity. The DOJ emphasized that Storm’s actions went beyond software development, alleging that he was directly involved in facilitating illicit financial transactions via the Tornado Cash platform.
“The Government is proceeding to try Storm on willfully conspiring to commit money laundering, sanctions evasion, and transporting and transmitting funds he knew were criminally derived,” a DOJ spokesperson said in a statement.
However, the department has dropped a key portion of the original indictment—specifically the allegation that Storm operated an unlicensed money transmitting business. Under U.S. law, such a charge hinges on failing to register with financial regulators, and DOJ officials indicated that ambiguity in current regulatory frameworks led to its removal from the case.
The trimmed indictment signals the DOJ’s attempt to align with a broader directive issued in April 2025, which instructed prosecutors to avoid “regulation by enforcement” in crypto cases with unclear legal boundaries. Yet, the continuation of the trial underscores the agency’s belief that Storm’s conduct crossed into clearly criminal territory.
Free Speech Defense Rejected as Trial Moves Forward
The Department of Justice’s decision to proceed with criminal charges against Roman Storm comes just weeks after the agency issued a memo signaling a change in how it approaches crypto-related prosecutions. The guidance, circulated internally in April, indicated that the DOJ would generally refrain from targeting mixing services or crypto platforms directly, instead focusing on individuals who use such tools to commit financial crimes.
This policy update was widely interpreted as a reflection of the crypto-friendlier stance of the Trump administration. Advocates for privacy tools—including NSA whistleblower Edward Snowden—have argued that platforms like Tornado Cash are neutral technologies designed to protect user anonymity, not inherently criminal operations.
Still, the DOJ has made clear that it sees Storm’s role as crossing a legal threshold. His trial was greenlit last year when U.S. District Judge Katherine Polk Failla rejected a motion to dismiss the case. Storm had argued that his work on Tornado Cash constituted protected speech under the First Amendment, likening the act of publishing code to expressing an idea.
Judge Failla disagreed, stating that while code can be speech, it is not shielded from legal consequences when used to further unlawful activity—particularly in the context of facilitating money laundering.
With the DOJ doubling down and the case headed for trial, Storm’s prosecution could establish a legal precedent with wide implications for developers of open-source, privacy-focused blockchain tools.
Tornado Cash Sanctions Dropped, Developer Crackdowns Continue
In a notable shift, the U.S. Treasury Department in March reversed its 2022 decision to sanction Tornado Cash, removing the crypto privacy protocol from the Office of Foreign Assets Control (OFAC) list. The original sanctions had effectively banned Americans from using the platform, which federal authorities claimed was used to facilitate over $7 billion in illicit transactions since its 2019 launch.
The reversal came after a landmark ruling by the U.S. Court of Appeals for the Fifth Circuit, which found that the Treasury had exceeded its legal mandate. The court concluded that Tornado Cash’s smart contracts—being autonomous and immutable—did not constitute “property” subject to OFAC jurisdiction, undermining the legal basis for the original sanctions.
While the U.S. steps back from direct action against the protocol itself, the global crackdown on Tornado Cash developers remains active. In the Netherlands, developer Alexey Pertsev was sentenced to 64 months in prison last year for money laundering tied to the platform. He was released in February under electronic monitoring while he prepares to appeal the conviction.
Quick Facts
- The DOJ confirmed Tornado Cash co-founder Roman Storm will face trial in Manhattan on charges of money laundering, sanctions evasion, and knowingly transmitting criminal proceeds.
- A key charge—operating an unlicensed money transmission business—was dropped, aligning with recent DOJ guidance against aggressive enforcement in regulatory gray zones.
- Storm’s First Amendment defense was rejected, with a federal judge ruling that code used to enable unlawful conduct is not protected speech.
- The U.S. Treasury lifted Tornado Cash sanctions following a court ruling, but global prosecutions—including a 64-month sentence for developer Alexey Pertsev—remain ongoing.
