A Tornado Cash coder was convicted while its sanctions were being lifted

A federal jury in Manhattan convicted Roman Storm, a co-founder of the cryptocurrency mixer Tornado Cash, on August 6, 2025, per IRS Criminal Investigation. After a four-week trial before US District Judge Katherine Polk Failla, jurors found him guilty of one count: conspiracy to operate an unlicensed money-transmitting business. The verdict was an early test of whether writing and maintaining privacy software can amount to running a money-transmission business.

It was a split decision. The jury deadlocked on the two graver charges — conspiracy to commit money laundering and conspiracy to violate US sanctions — leaving them unresolved, per the DeFi Education Fund's case tracker. The money-transmitting count alone carries up to five years in prison and a $250,000 fine.

The stakes were large. Prosecutors said Tornado Cash moved more than $1 billion in criminal proceeds over its life, including hundreds of millions of dollars linked to North Korea's state-backed Lazarus Group, per IRS Criminal Investigation. The service let users pool and shuffle deposits so the on-chain link between sender and receiver was broken — useful for privacy, and equally useful for laundering.

Sanctioned, then un-sanctioned

The legal ground shifted underneath the case. OFAC had placed Tornado Cash on its sanctions list in August 2022. In November 2024 the Fifth Circuit, in Van Loon v. Treasury, ruled the agency overstepped: the mixer's immutable smart contracts are not property anyone owns, and so fall outside the sanctions statute.

Treasury delisted Tornado Cash on March 21, 2025, removing more than 100 associated addresses from the sanctions list. Yet the criminal prosecution of a person who wrote and maintained the code went forward. The lesson for developers is stark: a tool can be ruled beyond the reach of sanctions while its authors remain exposed to prosecution over how it was operated.

What comes next

The case is not over. On March 9, 2026, the US Attorney's Office told the court it intends to retry the two deadlocked counts, proposing a start around October 2026, per the DeFi Education Fund. Storm's motion to be acquitted on the count he was convicted of is set for argument on April 9, 2026; he remains free on bail and has not been sentenced.

• The charge here is operating an unlicensed transmitter and moving known criminal funds — not the mere existence of a privacy tool; understand what conduct a case actually targets.
• 'Decentralized' and 'non-custodial' are engineering descriptions, not legal shields — a jury still held a person responsible.
• A sanctions delisting does not retroactively bless past transactions or erase related criminal exposure.
• Funds routed through a mixer can still be traced, frozen, or rejected by compliant exchanges long afterward.

— Sources: [IRS Criminal Investigation](https://www.irs.gov/compliance/criminal-investigation/founder-of-tornado-cash-crypto-mixing-service-convicted-of-knowingly-transmitting-criminal-proceeds) · [DeFi Education Fund](https://www.defieducationfund.org/u-s-v-storm-2026-update/)