Tornado Cash Co-Founder Found Guilty of Writing Code

Olivia Capozzalo & Camila Russo
August 06, 2025

gm, Defiers!

Today’s big story:

A deadlocked jury finally came to a partial verdict on the trial of Tornado Cash co-founder Roman Storm, finding him guilty of the lesser charge out of the three brought against him

In other news:

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Today’s Big Story

Writing Code Is Not a Crime. Privacy is Not a Crime. Somehow, a Jury Just Disagreed

Roman Storm didn’t launder money. He didn’t run a custodial service. He didn’t approve or process transactions. What he did was publish open-source code. Code that, once deployed to the Ethereum blockchain, became a decentralized protocol called Tornado Cash.

For that, a U.S. federal jury just found him guilty of a felony.

On Tuesday, Storm was convicted of conspiring to operate an unlicensed money transmitting business. He now faces up to five years in prison. The jury couldn’t reach a verdict on two far more serious charges: Money laundering and violating U.S. sanctions law, resulting in a mistrial on those counts.

But the single conviction was enough to send a chilling message: Publishing code that enables privacy can land you in prison.

It shouldn’t have. This case was never about laundering money. It was about whether developers can be held responsible for how others use their code, especially when they have no control over the system after it’s deployed. And the fact that a jury found even a sliver of criminal liability should alarm everyone in crypto.

Let’s be clear: Tornado Cash is a non-custodial, decentralized protocol. It allows users to break the on-chain link between their sending and receiving wallets, preserving a level of privacy that Ethereum’s public ledger doesn’t natively provide. That privacy is vital, not just for bad actors, but for activists, journalists, investors, and everyday users who don’t want their financial history permanently exposed.

The Government’s Case

The government’s case hinged on portraying Tornado Cash as a business that Storm and co-founder Roman Semenov operated, not merely a piece of software. They pointed to the Tornado Cash website, the DAO, and promotional blog posts as evidence that Storm remained actively involved and could have taken steps to prevent criminal use. But that ignores the core facts: Tornado Cash was autonomous, non-custodial, and open-source. There was no switch to turn it off, and no admin key to block specific users.

The charge Storm was convicted on—operating an unlicensed money transmitting business—even contradicts FinCEN’s own guidance. The agency has stated clearly that developers of non-custodial software protocols are not considered money transmitters, because they do not have control over user funds.

In other words, the very regulator tasked with enforcing anti-money laundering laws does not classify publishing open-source smart contracts as a money transmission activity. Yet prosecutors ignored that guidance and convinced a jury otherwise. The result is a legal interpretation that not only defies technical reality, but also undermines existing federal regulatory policy.

It’s worth noting that while the charges were brought in 2023 under the Biden administration, the trial and verdict are happening under the Trump administration. Whether that changes the trajectory of the case remains to be seen. If this administration wants to follow through with its promise to support crypto, this is the moment to do it. Storm’s appeal, and any decision to retry the two hung charges, will fall squarely within Trump’s DOJ.

Storm’s defense argued that writing code is protected speech under the First Amendment. That principle has been upheld for decades, going back to the crypto wars of the 1990s, when courts ruled that publishing encryption algorithms couldn’t be banned. Yet in 2025, in a federal courtroom in Manhattan, that precedent didn’t hold.

A Blow to DeFi

Why does this matter for DeFi? Because the entire ecosystem runs on open-source, immutable smart contracts. Uniswap, Aave, Lido, every major DeFi protocol follows the same design philosophy: deploy code that no one can censor, restrict, or control. That’s the promise.

But now, the legal risk for developers has changed. If the government decides you “should have known” your protocol might be misused, you could be held liable, even if the protocol is unstoppable by design.

This verdict sets a dangerous precedent. It shifts the burden of enforcement from users to developers. It threatens to chill innovation at a time when the U.S. should be embracing open financial infrastructure, not criminalizing its architects.

What’s Next

Storm’s legal team is expected to appeal the conviction. Meanwhile, the Department of Justice could still retry him on the unresolved charges, which carry up to 20 years in prison.

The fact that prosecutors were able to convince a jury that Storm was running a “money transmitter” despite not holding or touching funds shows how poorly the general public understands crypto and how easily that ignorance can be weaponized. At The Defiant, we put all our efforts into changing that.

For now, Storm remains free on bail. But the open-source community is on notice. Even with all the encouraging regulatory moves from Congress and the SEC, DeFi developers now need to speculate on whether the government thinks they could have stopped someone from using their protocol “the wrong way.”

But I’m an optimist, and just as with other misguided regulatory decisions that have been overturned recently in favor of this industry, I’m confident rationality will prevail here, too.

With love,

Cami, founder of The Defiant

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