The U.S. Department of Justice has eased part of its case against Roman Storm, the co-founder of crypto mixer Tornado Cash, just two months before his high-profile trial begins on July 14. In a letter dated May 15, Acting U.S. Attorney Jay Clayton informed Judge Katherine Polk Failla that prosecutors will no longer pursue a portion of the charge that alleged Storm operated an unlicensed money transmitting business.
This adjustment means the DOJ is dropping the specific allegation under Title 18 U.S. Code § 1960(b)(1)(B), which centered on Storm’s failure to register Tornado Cash as a money transmitting business. However, this doesn’t equate to an acquittal. The remaining, more serious charges still stand—including conspiracy to commit money laundering, violating international sanctions law, and transmitting funds from unlawful sources.
Backdrop: A Case That Shook the Crypto World
Storm and his fellow co-founder Roman Semenov were indicted in 2023 for their alleged roles in enabling the movement of illicit funds through Tornado Cash. Among those reportedly benefitting from the platform was the North Korean Lazarus Group, a hacking collective sanctioned by the U.S. government. Tornado Cash’s technology enables users to obfuscate the origin and destination of their crypto assets, a function that has made it both a tool for privacy advocates and a magnet for illegal use.
Storm has pleaded not guilty, maintaining that he was merely a developer contributing to open-source code. He argues that holding him criminally liable for how others use the code raises serious First Amendment issues. His legal team also contends that Tornado Cash was not operated like a traditional financial intermediary and therefore should not be subject to the same regulatory standards.
Policy Shift: Ending “Regulation by Prosecution”
This shift in the case follows a broader change in the DOJ’s approach to crypto-related enforcement. The letter from U.S. prosecutors cited the April 7, 2025 memorandum by Deputy Attorney General Todd Blanche, which instructed prosecutors to avoid criminal charges for technical regulatory violations. The memo criticized the prior practice of enforcing compliance through courtrooms rather than clear guidance, particularly when platforms or developers were not directly managing user transactions.
By dropping the registration-based charge, the DOJ appears to be aligning with this new stance. Still, the department remains firm in pursuing allegations that Tornado Cash was knowingly used to launder criminal proceeds and evade international sanctions, charges that carry far more severe penalties.
Wider Implications for Crypto Developers
The Tornado Cash case has become a legal flashpoint in the debate over how much responsibility developers should bear for the actions of their users. Critics argue that prosecuting individuals for writing code sets a dangerous precedent, one that could chill innovation in the open-source and blockchain ecosystems.
The arrest and trial of another Tornado Cash co-founder, Alexey Pertsev, has also drawn international attention. Pertsev was arrested in the Netherlands in 2022 and sentenced in May 2024 to five years and four months in prison for similar money laundering charges. Although he has since been released under electronic monitoring to prepare for his appeal, his conviction has sent ripples through the global crypto community.
With Storm’s trial approaching and the DOJ recalibrating its legal approach, developers, regulators, and privacy advocates alike are watching closely. The outcome may help define the limits of liability in an increasingly decentralised world—where code is law, but law is still catching up.
Looking Ahead: A Trial That Could Set a Precedent
As Storm prepares for his July 14 trial, the narrowed scope of the charges offers a partial reprieve but doesn’t eliminate the risks. If convicted of the remaining charges, Storm could still face decades in prison.
The Tornado Cash saga is more than just a legal battle; it’s a pivotal moment for how governments interpret the role of developers in decentralised systems. Whether Storm is ultimately found guilty or not, the case is poised to influence how future projects are built, funded, and regulated.
