Federal prosecutors have forcefully rejected acquittal arguments from Tornado Cash co-founder Roman Storm, challenging his legal defense and setting the stage for a pivotal retrial scheduled for October 2025. The case, which could redefine regulatory boundaries for cryptocurrency privacy tools and developer liability, is being closely watched by the entire crypto industry.
Jay Clayton, the U.S. Attorney for the Southern District of New York and former SEC chair, filed a response opposing Storm's motion for acquittal. Clayton specifically targeted the defense's attempt to rely on the 2026 Supreme Court civil copyright case Cox Communications, Inc. v. Sony Music Entertainment to argue against criminal intent. He stated that Storm's conduct "bears no resemblance" to the Cox case and that "a civil copyright case has no relevance here in the first place."
Storm faces charges including conspiracy to commit money laundering and conspiracy to violate sanctions. A jury convicted him in August on a charge of operating an unlicensed money transmitting business but failed to reach a unanimous verdict on the other two counts, leading to the potential retrial. Prosecutors argue that Storm failed to implement effective anti-money laundering (AML) controls, such as customer identification procedures and transaction monitoring systems, within Tornado Cash. They emphasize the platform operated without any formal compliance program.
The defense maintains that Storm should not be held criminally liable for how third parties used the open-source code, arguing he lacked control over the decentralized protocol. Storm himself highlighted the severity of the charges, stating: "The 2 counts = up to 40 years in federal prison. For writing open-source code. For a protocol I don't control. For transactions I never touched."
The legal battle unfolds amidst leadership changes at the Department of Justice. Acting Attorney General Todd Blanche, who replaced Pam Bondi, previously authored a memo calling for an end to "regulation by prosecution," which the defense has cited in its broader argument. Prosecutors have asked the court to consider a retrial date in October, though it remains unconfirmed.
The Tornado Cash protocol was sanctioned by the U.S. Treasury's Office of Foreign Assets Control (OFAC) in August 2022, marking the first time OFAC sanctioned a decentralized software protocol. The case's outcome is expected to set a major precedent for how courts interpret developer responsibility and apply existing financial crime laws to decentralized technologies, with profound implications for the future of privacy tools and DeFi regulation.
