The upcoming trial of Roman Storm, one of the developers behind the crypto privacy protocol Tornado Cash, will move forward as planned, though prosecutors have agreed to slightly pare down the charges against him. This update comes amid a broader shift in how the U.S. Department of Justice (DOJ) intends to handle crypto-related prosecutions moving forward.
On May 15, federal prosecutors in Manhattan, led by Acting U.S. Attorney Jay Clayton, notified Judge Katherine Polk Failla that they would be dropping part of a charge involving Storm’s alleged failure to register as a money transmitter. The decision follows a sweeping memo issued on April 7 by Deputy Attorney General Todd Blanche, which called for the DOJ to scale back aggressive legal actions against the crypto sector — particularly cases that could be interpreted as “regulation by prosecution.”
“The Department of Justice has reassessed its stance on certain aspects of crypto enforcement,” Clayton wrote. “In light of that, we have decided to withdraw a portion of the charge that accused Mr. Storm of conspiring to operate an unlicensed money transmitting business.”
Still, not all charges have been dropped. Storm remains on the hook for two major accusations: conspiracy to commit money laundering and conspiracy to violate U.S. sanctions — both of which carry heavy penalties, with potential prison sentences of up to 20 years for each charge. Prosecutors are also maintaining that Storm knowingly facilitated transactions involving illicit funds via Tornado Cash, a crypto mixer that has long drawn scrutiny from regulators for its role in obscuring blockchain transactions.
One of the more controversial elements of the case stems from Tornado Cash allegedly helping to launder over $1 billion in digital assets — funds that authorities claim include cryptocurrency stolen by North Korea’s Lazarus Group, a state-backed hacking organization sanctioned by the U.S. government.
Storm, who has pleaded not guilty, is currently set to stand trial on July 14. His co-founder, Roman Semenov, has also been charged but remains at large and is believed to be in Russia.
The April DOJ memo, which prompted this partial rollback, has become a key talking point in other crypto-related cases as well. In particular, it has been cited by defense teams seeking to have charges dropped against various figures in the digital asset space.
For example, the co-founders of the privacy-focused Samourai Wallet, Keonne Rodriguez and William Hill, have invoked the memo in their legal battle against charges of operating an unlicensed money transmitting business and money laundering. Similarly, SafeMoon CEO Braden John Karony is referencing the same DOJ memo in his efforts to fight charges of wire fraud, securities fraud, and conspiracy to launder money.
In the case of Tornado Cash, the DOJ appears to be walking a careful line — acknowledging the evolving regulatory landscape without abandoning its pursuit of accountability. The trimmed charges against Storm suggest a nuanced approach that respects the guidance of the new DOJ policy while maintaining the agency’s commitment to combating illicit finance in crypto.
As the trial date approaches, the case is poised to become a landmark legal battle in the ongoing clash between privacy tools, decentralized finance, and federal enforcement — one that could have lasting implications for developers and crypto projects navigating the complex intersection of technology and regulation in the United States.
