Judge Declares Partial Mistrial in Tornado Cash Case as Roman Storm Faces Mixed Verdict
New York, NY – August 7, 2025 – A federal judge in the Southern District of New York declared a partial mistrial in the high-profile case against Roman Storm, co-founder of the cryptocurrency mixing service Tornado Cash, on August 6, 2025. The jury, after a month-long trial, found Storm guilty of conspiracy to operate an unlicensed money-transmitting business but could not reach a verdict on the more serious charge of conspiracy to commit money laundering. Storm was acquitted of conspiracy to violate sanctions under the International Emergency Economic Powers Act (IEEPA), a significant win for his defense. The partial mistrial leaves open the possibility of a retrial on the unresolved money laundering charge, intensifying debates over the legality of crypto mixers and privacy-focused technologies.
Case Background and Trial Outcome
Roman Storm, 35, a naturalized U.S. citizen, and his co-founder Roman Semenov, a Russian citizen, were indicted in August 2023 for their roles in developing and operating Tornado Cash, a cryptocurrency mixer accused of laundering over $1 billion, including funds for North Korea’s Lazarus Group. The service, which anonymizes transactions by pooling and redistributing cryptocurrency, processed funds tied to darknet markets, ransomware, and fraud, according to prosecutors. Storm, arrested in 2023, faced three counts: conspiracy to commit money laundering, conspiracy to operate an unlicensed money-transmitting business, and conspiracy to violate sanctions. Semenov remains at large.
After weeks of deliberation, the jury convicted Storm on the money-transmitting charge, which carries a maximum five-year sentence, but deadlocked on the money laundering conspiracy charge, which could have resulted in up to 20 years. U.S. District Judge Katherine Polk Failla declared a partial mistrial on the latter, allowing prosecutors to decide whether to retry Storm. The acquittal on the sanctions charge, tied to Tornado Cash’s alleged support for Lazarus Group, was celebrated by crypto advocates, with posts on X like @valkenburgh noting the charge was “inappropriate from the start.”
Legal and Industry Implications
The case has sparked intense debate over crypto mixers, which offer privacy by obscuring transaction origins but are often exploited for illicit purposes. Prosecutors argued Tornado Cash facilitated $96 million from the Harmony blockchain theft and $7.8 million from the Nomad heist, both linked to North Korea. Storm’s defense, led by attorney Brian Klein, contended that Tornado Cash is open-source software, not a business, and that developers should not be held liable for users’ actions. Klein highlighted the sanctions acquittal as a “huge win,” arguing the money-transmitting charge misapplies regulations meant for centralized entities.
The partial mistrial follows a related legal victory for Tornado Cash. In July 2024, the Fifth Circuit ruled that the Treasury’s Office of Foreign Assets Control (OFAC) overstepped by sanctioning Tornado Cash’s code, as it is not a “person” or “entity” under IEEPA. This ruling, combined with Storm’s acquittal on the sanctions charge, has fueled arguments that regulators are unfairly targeting privacy tools. However, the guilty verdict on money transmission reinforces the government’s stance that mixers operating without Bank Secrecy Act (BSA) registration are illegal, as seen in the 2024 conviction of Bitcoin Fog’s Roman Sterlingov, who received 12.5 years for laundering $400 million.
Public and Industry Reaction
The crypto community has rallied behind Storm, with Coin Center’s director of communications telling Forbes that decentralized mixers like Tornado Cash differ from centralized services like Bitcoin Fog, raising questions about whether regulators will distinguish between them. Posts on X, such as @CoinDesk’s report of the verdict, reflect optimism among crypto advocates, with some viewing the partial mistrial as a chance to challenge the money laundering charge further. Critics, however, argue that mixers enable crime, citing Sterlingov’s case, where Bitcoin Fog processed funds tied to narcotics, identity theft, and child sexual abuse material.
The government’s crackdown on mixers continues, with recent indictments against operators of Blender.io and Sinbad.io in Georgia for laundering ransomware proceeds. The proposed Blockchain Integrity Act, introduced in May 2024, aims to pause financial institutions’ transactions with mixers for two years to assess their risks, signaling ongoing regulatory pressure.
Looking Ahead
Prosecutors, led by Assistant U.S. Attorneys Andrew K. Chan and David R. Felton, have until September 2025 to decide on a retrial for the money laundering charge. Storm, released on bail pending sentencing for the money-transmitting conviction, faces up to five years, with a date to be set by Judge Failla. The case’s outcome could shape future prosecutions of crypto developers, particularly for decentralized platforms, and influence debates over privacy versus regulation in the crypto industry.
For further updates, visit the Southern District of New York’s U.S. Attorney’s Office website at www.justice.gov/usao-sdny or follow CoinDesk’s coverage at www.coindesk.com.