- Federal prosecutors have filed a 113-page brief asking US District Judge Katherine Polk Failla to reject Storm’s motion to overturn his August 2025 conviction for illegally running a money-transmitting business
- Back in August 2022, the US Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Tornado Cash, accusing it of facilitating over $7 billion in illicit crypto laundering
- If the courts uphold that deploying or maintaining code equals operating a money-transmitting business, it could create major legal problems for the developers of privacy tools and crypto mixers
Federal prosecutors have filed a 113-page brief asking US District Judge Katherine Polk Failla to reject Roman Storm’s motion to overturn his August 2025 conviction for illegally running a money-transmitting business.
The jury at the time was deadlocked on two more serious charges, money laundering and sanctions evasion.
DOJ Argues “Functional Authority,” Not Decentralization
The prosecutors state that the evidence against Storm was overwhelming and emphasize they believe he and co-defendants maintained functional authority over Tornado Cash, despite claims that the platform was decentralized in nature.
Back in August 2022, the US Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Tornado Cash, accusing it of facilitating over $7 billion in illicit crypto laundering, including funds tied to North Korea’s Lazarus Group.
Related: 4,920 ETH Worth $16.25M Pulled From Tornado Cash As Ethereum Falls 13% This Week
Interestingly, the case is now seen by many as a big landmark case that will determine can the creators of privacy tools be held criminally responsible, even if they never actually hold or control their users’ money.
If the courts uphold that deploying or maintaining code equals operating a money-transmitting business, it could create major legal problems for the developers of privacy tools and crypto mixers.
What Is Tornado Cash?
Tornado Cash is an Ethereum-based privacy mixer launched in 2019 by developers Roman Storm, Roman Semenov, and Alexey Pertsev.
It uses zero-knowledge proofs (ZK-SNARKs) to completely separate the sender from the receiver on the blockchain. A user can deposit funds into a shared pool and then withdraw the same amount to a brand-new wallet address, leaving no public record linking the two transactions.
Unlike custodial mixers, Tornado Cash designed itself as a fully non-custodial, automated protocol, meaning developers claimed they held no control over user funds. At its peak, Tornado Cash processed over $1 billion in monthly volume during market highs, attracting both privacy-seeking users and criminals looking to hide their tracks.
For the crypto market, the case against Tornado Cash, or rather Roman Storm, creates new legal risks for projects focused on privacy, coin mixers, and DeFi. This development is likely to impact both investor confidence and change how developers build these kinds of services in the future.
Related: US Court Overturns Sanctions on Crypto Mixer Tornado Cash
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Source: https://coinedition.com/doj-moves-to-uphold-tornado-cash-verdict/
