Co-founder convicted for operating an unlicensed money transmitting service, but jury deadlocks on money laundering charges.
According to Inner City Press, a Manhattan jury delivered a partial verdict in the trial of Roman Storm, co-founder of the mixing service Tornado Cash. The court found Storm guilty of operating an unlicensed money transmitting service, but failed to reach a unanimous decision on the charges of money laundering and sanctions violations.
After several days of deliberation, the jury of the U.S. District Court for the Southern District of New York reached a deadlock on August 6, agreeing only on one of the three main charges. Judge Katherine Polk Failla, who presided over the trial, described the case as a “hard-fought case.”
While Storm will now face the legal consequences of his conviction for unlicensed money transmission, the more serious charges remain unresolved, potentially setting the stage for a retrial.
The charges against Tornado Cash
In 2023, Roman Storm was formally indicted on conspiracy charges related to money laundering and violations of international sanctions tied to the operation of Tornado Cash. Prosecutors claimed the protocol facilitated over $1 billion in laundering transactions and processed millions of dollars for the Lazarus Group, a North Korean hacking organization under international sanctions.
During closing arguments, prosecutors argued that Storm was fully aware of the illicit activities and profited millions of dollars from the service. They also claimed the co-founder knew that North Korean hackers were using the mixer.
Storm’s defense
Storm’s defense attorney argued that his client did not intend for hackers to use Tornado Cash. According to the defense, when Storm discovered that North Korean groups were exploiting the service, he responded with frustration and disappointment.
The case has mobilized the crypto community, including the DeFi Education Fund and Ethereum co-founder Vitalik Buterin. Buterin noted that Tornado Cash was partly built based on his suggestions, stating:
The precedent of Samourai Wallet
Storm’s verdict comes just a week after Samourai Wallet co-founders Keonne Rodriguez and William Lonergan Hill pleaded guilty to charges of operating an unlicensed money transmission business.
With the sentencing hearing scheduled in a matter of weeks, Roman Storm faces up to five years in prison for running an unlicensed money transmitting service.
Additionally, the partial verdict leaves many issues unresolved and could lead to further legal proceedings to fully determine Storm’s criminal liability. According to Jake Chervinsky, chief legal officer at venture capital firm Variant Fund, the U.S. government may still pursue Storm on the charges of money laundering and sanctions violations due to the hung jury.“DOJ will decide in the coming days if it wants to retry those charges in a new trial,” Chervinsky wrote on X.
