Manhattan Jury Convicts Tornado Cash Developer for Unlicensed Money Transmission

Roman Storm, co-developer of the Ethereum-based cryptocurrency mixer Tornado Cash, was convicted by a Manhattan federal jury of conspiring to operate an unlicensed money transmitting business, but the jury deadlocked on charges of money laundering and sanctions evasion. Prosecutors argued that Storm facilitated laundering over $1 billion in cryptocurrency, including illicit funds linked to the North Korean-backed Lazarus Group, while the defense maintained he was merely a software developer without control over users' actions. The verdict represents a milestone in the legal treatment of decentralized finance tools, as it partially upholds the government's case but acquits Storm of more serious charges, setting a precedent concerning developer liability for user behavior. Concerns remain about the future implications for privacy rights and decentralized protocols, with experts warning that prosecuting developers for third-party use of open-source code could have chilling effects on innovation in the crypto space. Storm was released on bail despite prosecutors citing flight risk due to his access to significant cryptocurrency holdings and Russian ties, with sentencing pending. The case highlights the ongoing legal challenges in regulating privacy-focused cryptocurrency technologies and the balance between enforcement and protecting decentralized innovation.