A New York federal jury delivered a split verdict Tuesday in the criminal trial of Tornado Cash co-founder Roman Storm. Storm was convicted of conspiracy to operate an unlicensed money transmitting business, but jurors failed to reach a verdict on two other counts.

Judge Katherine Polk Failla denied prosecutors’ request to detain Storm following the verdict. While finding Storm guilty on the money transmission charge—a decision widely criticized within the cryptocurrency industry as a mischaracterization of blockchain technology—prosecutors failed to secure convictions on money laundering and sanctions evasion charges.

Industry Displeasure Over Core Charge

The guilty verdict represents a setback for the crypto community, which vehemently contested the “money transmitting business” charge. Industry figures argue the label inaccurately describes Tornado Cash and similar decentralized protocols, fearing the precedent could chill development of privacy-enhancing tools.

A Note of Caution for Judges

Prosecutors had argued Storm posed a flight risk, citing his ties to Russia and ownership of substantial cryptocurrency assets. However, Judge Failla noted his family connections in the United States and the likelihood of an appeal focusing on the money transmission charge.

‘Privacy is Not a Crime’

The lengthy trial concluded after three-and-a-half weeks of testimony and arguments in lower Manhattan. Throughout the proceedings, Storm appeared impassive, flanked by a diverse audience including crypto developers, legal counsel, and privacy advocates.

The verdict culminated arguments on both sides: prosecutors labeling Tornado Cash a “washing machine for dirty money,” while defense attorney Keri Axel described it as a “legitimate software project backed by US investors” sought by ordinary crypto users.

Tornado Cash’s Turbulent Journey

The trial underscored Tornado Cash’s tumultuous history. The protocol, which obscures transaction trails on blockchains like Ethereum, gained unwanted attention after North Korean hackers used it to launder funds stolen from an exchange in March 2022.

The attack prompted August 2022 sanctions against Tornado Cash by the US Treasury Department. Co-founder Alexey Pertsev was arrested in the Netherlands and later convicted of money laundering, receiving a five-year sentence. Storm himself was indicted in 2022 and arrested shortly afterward.

A significant industry victory followed in March 2025 when FinCEN reversed sanctions on the protocol’s immutable smart contracts, though Storm’s convictions returned to the table.

A Signal of Limits

Storm’s case underscores the evolving legal landscape for decentralized technologies. While First Amendment arguments championing crypto source code faced skepticism from Judge Failla, the successful exclusion of certain evidence was noted as a limitation by Storm’s legal team.

The trial concluded not with the dismissal requested by Storm’s attorneys, but with a guilty verdict on one key count while the other charges remained pending or unresolved. The inconsistent jury deliberation suggests the legal path remains uncertain for Storm and potentially for other developers creating privacy tools in the burgeoning cryptocurrency space.