The U.S. Department of Justice Continues to Uphold Criminal Charges Against Tornado Cash Developer, Crypto Regulation Sparks Renewed Controversy
Despite a softening stance by the U.S. Department of Justice towards crypto platforms, federal prosecutors have nonetheless maintained federal criminal charges against Tornado Cash developer and co-founder Roman Storm.
According to internal communications from the U.S. Department of Justice on May 15, Storm faces charges of money laundering and evading sanctions, with a trial expected in less than two months at a federal court in Manhattan.
Tornado Cash is an Ethereum-based cryptocurrency mixer designed to obscure the origin and destination of transactions. Previously, federal prosecutors accused Storm of conspiring to launder money, evade U.S. sanctions, and operate an unlicensed remittance business through Tornado Cash.
However, the Financial Crimes Enforcement Network (FinCEN) has pointed out that “non-custodial entities” like Tornado Cash should not be considered money transfer services, highlighting the tensions between law enforcement and decentralized software developers.
Amanda Tuminelli, Executive Director of the DeFi Education Fund, stated that the technicians developing neutral privacy tools should not be subjected to “unreasonable criminal standards.” Her viewpoint has also garnered continued support for Storm from industry leaders, including Ethereum co-founder Vitalik Buterin.
The Department of Justice's actions appear contradictory to an internal memo leaked last month. The memo shifted the regulatory focus towards “individuals using crypto tools for criminal purposes” rather than platforms and was seen as a signal of easing from the Trump administration towards the crypto industry. However, the advancement of the Storm case indicates that even with a policy shift, developers may still become the regulatory “target.”
The judicial backdrop of this case dates back to 2022 when Tornado Cash was sanctioned by the U.S. Treasury for involvement in $7 billion of illegal transactions, later removed from the sanctions list after being ruled as “not property” due to its immutable smart contracts. Its co-developer Alexey Pertsev was sentenced to 5 years in prison in the Netherlands last year and was released during an appeal in February.
In summary, this case not only concerns the fate of a single developer but could also serve as a critical precedent for the legal boundaries of the crypto industry. The tensions between the “neutrality” of decentralized code and the definition of regulatory scope, as well as the conflict between technological innovation and compliance, have become focal points of industry attention.
