The U.S. Department of Justice ruled that Roman Storm, the founder of Tornado Cash, was guilty of "unlicensed money transfer offenses," and the encryption community collectively expressed support.

The U.S. Department of Justice has found Tornado Cash founder Roman Storm guilty of operating an unlicensed money transfer service, which poses a significant impact on DeFi developers and regulatory frameworks. (Background: The U.S. Department of Justice plans to prosecute Tornado Cash's investor Dragonfly Capital) (Additional background: Tornado Cash co-founder Roman Storm reiterated that "open source software is innocent," with Vitalik supporting: on-chain privacy is critically important.) On the 6th, Eastern Time, a Manhattan jury ruled that Tornado Cash co-founder Roman Storm was guilty of "conspiring to operate an unlicensed money transfer business," with a maximum penalty of five years in prison. This is the first time the U.S. has included decentralized protocol developers into the same compliance framework as traditional money transfer operators, drawing global attention from the crypto market. Details of the ruling and legal focus The jury was unable to reach a unanimous verdict on the more serious charges of "conspiracy to launder money" and "conspiracy to violate sanctions regulations," legal expert Samson Enzer pointed out that this reflects the difficulty for prosecutors to prove that developers had direct control over the protocol, or that they subjectively intended to assist in criminal activity. Nevertheless, Tornado Cash provides anonymous transaction services, which prosecutors believe assisted in laundering over $1 billion, including funds from the North Korean hacking organization Lazarus Group. Ultimately, the charge of "operating an unlicensed money transfer service" was established, demonstrating that the government can intervene in decentralized applications through existing transfer regulations, and that all future programs providing mixing or privacy features may be required to comply with the same standards. Community reactions and calls for regulation Following the ruling, the crypto community quickly expressed their views. The DeFi Education Fund criticized the outcome as "disappointing," arguing that the case could create a chilling effect on developers; Coin Center and Blockchain Association also called on the government to provide clear regulations instead of relying on "litigation-style regulation." According to crypto journalist Eleanor Terrett's post, Storm plans to refute the charge and appeal, calling it nonsense. Just outside the courtroom, I encountered @rstormsf and asked how he felt. He spoke calmly, but with a noticeable smile, saying: "This is a big win. That '1960 charge' is bullshit, and we're going to fight it all the way. You know how President Trump said 'fight, fight, fight'? We're going to do the same." He expressed relief that he was not detained and mentioned his 5-year-old daughter as one of the reasons he insisted on contesting the guilty charge. He said he would return to Seattle tomorrow. NEW: Just caught @rstormsf outside the courtroom. I asked how he was feeling. In a quiet voice, but with a noticeable smile, he told me: “It’s a big win. The ‘1960’ charge is bullshit and we’re going to fight it all the way. You know how President Trump said ‘fight, fight,… — Eleanor Terrett (@EleanorTerrett) August 6, 2025 Some observers have drawn parallels to President Trump's earlier pardon of Silk Road operator Ross Ulbricht, but it remains unknown whether Storm might receive similar treatment. Industry prospects and potential ripple effects The White House recently proposed in a report that current AML regulations need to be modernized to respond to the challenges posed by decentralized finance. With the Storm case now settled, global regulatory bodies are sure to monitor the U.S. approach and may follow suit in tightening regulations. For developers and investors, the legal costs and risks of operating privacy protocols in the U.S. are rapidly increasing, and project teams will likely need to strengthen compliance departments, implement geographic restrictions or KYC processes, or even shift to jurisdictions with looser regulations. The judgment against Roman Storm has ushered decentralized privacy technology into a new scrutiny period. On one side is the demand for innovation and privacy, while on the other are anti-money laundering and national security considerations; how the balance will be struck remains undecided. However, it is clear that the crypto industry has officially entered the "compliance-first" era, where every product design and capital layout will be recalculated for risk within legal boundaries. Related reports From privacy evangelist to "money laundering" defendant, Tornado Cash co-founder Roman Storm faces a fateful ruling. Is the Tornado Cash mixer saga not yet over? Coinbase angrily criticizes the U.S. Treasury for ambiguous handling and evading final judgment. (U.S. Department of Justice rules Tornado Cash founder Roman Storm guilty of "operating an unlicensed money transfer service," with the crypto community collectively rallying support.) This article was first published in BlockTempo, the most influential blockchain news media.