Tornado Cash Co-Founder Found Guilty: What It Means
Tornado Cash Co-Founder Convicted After Trial
A Manhattan jury has found Roman Storm, a co-founder and developer of the cryptocurrency mixer Tornado Cash, guilty of charges related to conspiracy to operate an unlicensed money business.
The verdict, delivered in the US District Court for the Southern District of New York (SDNY) on Wednesday, found Storm guilty on one felony count related to his role in the operation of Tornado Cash, according to court reports.
The Verdict: Key Takeaways
- Guilty Verdict: Roman Storm was convicted of conspiracy to run an unlicensed money transmittal business.
- Potential Sentence: The charge carries a maximum sentence of up to five years in prison.
- Deadlocked Jury: The jury was initially deadlocked on charges of conspiracy to commit money laundering and conspiracy to violate North Korea sanctions.
The Prosecution's Case
Prosecutors built their case by presenting witnesses, including FBI agents, IRS representatives, and hackers, who testified that Storm had the capability to modify Tornado Cash’s code to prevent illicit activities but allegedly chose not to.
Defense Arguments
Storm’s legal team presented expert witnesses, including Ethereum core developer Preston Van Loon and NAXO co-founder Matthew Edman, to argue his innocence.
Background
Storm was initially indicted in August 2023 on charges including money laundering, conspiracy to operate an unlicensed money transmitter, and conspiracy to violate US sanctions. He pleaded not guilty and has been free on bail since his arraignment.
Implications for the Crypto Industry
Judge Katherine Failla noted that she was mindful of other crypto-related cases, such as those of Sam Bankman-Fried, Nathaniel Chastain, and Karl Greenwood, all of whom received prison sentences. This case underscores the increasing scrutiny of cryptocurrency mixers and their potential use in illicit activities. Projects like Tornado Cash often undergo audits to ensure security and regulatory compliance. Platforms like Codeum provide security audits and KYC (Know Your Customer) solutions that help blockchain projects navigate complex regulations and maintain compliance. It also highlights the importance of building secure and compliant decentralized applications.
What's Next?
Storm’s sentencing hearing has not yet been scheduled. He maintains his innocence. His legal defense fund has received over $3 million in contributions from supporters, including Vitalik Buterin, Matt Huang, and the Ethereum Foundation.