Storm’s Forecast: Guilty Verdict in Tornado Cash Case

A jury in Manhattan has delivered a guilty verdict against Roman Storm on Wednesday, convicting him of conspiracy to operate an unauthorized money transfer business. This was one of three charges levied against the Tornado Cash developer.

The jury remained divided on the other two conspiracy charges: conspiracy to launder money and conspiracy to sidestep economic sanctions.

The partial verdict was reached after four days of deliberation. Initially, the case seemed headed for a hung jury, prompting Judge Katherine Fallia to issue an Allen charge, urging the jurors to continue their discussions in the hope of reaching a consensus on all counts, however, ultimately this proved unsuccessful for the remaining counts.

Storm faced charges in 2023 that included conspiracy to commit money laundering, conspiracy to violate sanctions, and conspiracy to run a money transmitting business without a license.

The jury’s deadlock on the remaining charges raises the possibility of a second trial. This development comes nearly a week after the prosecution and defense presented their final arguments. Privacy advocates contend that the case has far-reaching consequences for developers and their ability to create open-source software without fear of prosecution.

With the government contemplating its next steps, federal prosecutors have requested that Storm be remanded to custody, emphasizing his links to Russia. As of 1:00 PM Eastern Time, prosecutors have not indicated whether they will seek a retrial on the two unresolved counts.

Throughout the three-week trial, Storm’s legal team argued that Tornado Cash wasn’t specifically designed for illicit activities, but rather as a
tool enabling individuals
to transact privately. The prosecution dismissed this as a “cover story,” asserting that Storm aimed to profit by “concealing illicit funds for criminals.”

The jury’s verdict is in some respects, the high point of the government’s years-long campaign to shut down
cryptocurrency mixers,
tools that mask the origin and destination of digital currencies by combining them with other users’ funds.

Though subsequently lifted, the U.S. Treasury Department
added Tornado Cash to its sanctions list
in August 2022. The government estimated that $7 billion had been laundered through the platform since its inception in 2019, including funds linked to the North Korean Lazarus Group.

Over the past few weeks, the jury heard testimonies from individuals who were scammed and those who carried out the scams themselves. One witness claimed that she lost $250,000 to a scammer who laundered the funds using Tornado Cash, a claim that
defense attorneys have disputed.
Storm’s counsel also argued that the prosecution misrepresented the nature of key
Telegram messages.