The legal fate of Tornado Cash co-founder Roman Storm is now in the hands of a federal judge following a pivotal hearing on April 9, 2026. Last year, a jury convicted Storm of conspiracy to operate an unlicensed money transmitting business but deadlocked on the more severe charges of conspiracy to launder money and conspiracy to evade US sanctions.
Judge Katherine Polk Failla of the US District Court for the Southern District of New York heard arguments from both sides and now has several weeks to decide whether to acquit Storm. His defense team, led by Cooley partner Brian Klein, argued that prosecutors improperly brought the case to New York and failed to prove Storm committed a crime. Klein emphasized that the US Treasury Department considers crypto mixers like Tornado Cash to be legitimate businesses, stating, "Maintaining your cryptocurrency mixer … that would also be legal. I think that’s an important starting point here."
Prosecutors defended the evidence presented during last year's trial. If Judge Failla sides with the government, a retrial on the unresolved charges is slated for later this year. If she acquits Storm, the Department of Justice, including acting Attorney General Todd Blanche, would need to decide whether to pursue the case further.
The hearing revealed the judge's deep scrutiny of the technical and legal boundaries. In a tense exchange, Failla pressed Assistant US Attorney Ban Arad on whether merely creating or maintaining Tornado Cash constituted a crime. Arad suggested that maintaining the service could be criminal because it mixes "clean" crypto with illicit funds, thereby facilitating laundering. Failla dismissed this argument, remarking, "You were doing better before you started talking." However, she cautioned observers not to read into her questions, indicating her mind was not yet made up.
Tornado Cash is a decentralized mixing protocol on Ethereum and other blockchains designed to obscure transaction trails, popular for privacy but also used by cybercriminals like the North Korean Lazarus Group, which laundered hundreds of millions through it. The case against Storm and his co-founder Alexey Pertsev, who is appealing a five-year sentence, has become a rallying cause for cypherpunks and DeFi advocates who argue authorities misunderstand the technology.
Amanda Tuminelli, Chief Legal Officer of the DeFi Education Fund, who attended the hearing, noted, "It was good to see the judge digging in and asking detailed questions, but there is no way to predict how she will rule." She observed that Failla's focus on scheduling retrial dates suggests the case will likely continue.
The outcome is being closely watched as it follows a memo from acting AG Todd Blanche aimed at curbing prosecutions of software developers and coincides with legislative efforts in Washington to protect non-custodial Web3 developers from being classified as money transmitters.
