US DOJ Seeks October Retrial for Tornado Cash Co-Founder Roman Storm on Hung Counts

Key Point

The US Department of Justice filed a March 9 letter asking Judge Katherine Polk Failla to set an October retrial for Tornado Cash co-founder Roman Storm on the two charges a jury could not decide last summer. A jury in the Southern District of New York on August 6, 2025 found Storm guilty of conspiring to operate an unlicensed money transmitting business, which carries a maximum five-year sentence, but failed to reach unanimous verdicts on conspiracy to commit money laundering and conspiracy to violate US sanctions, and each of those counts carries a maximum of 20 years. Prosecutors told the court they are prepared to retry the unresolved counts as early as this spring and proposed October 5 or 12 as trial dates, while the defense said it is unavailable until late September or early December and has filed a Rule 29 motion to overturn the guilty verdict, with oral argument scheduled for April 9. The article notes that this push comes despite an April 2025 memorandum from Deputy Attorney General Todd Blanche directing the DOJ to stop "regulation by prosecution" of digital assets and just two days after a US Treasury GENIUS Act report to Congress recognized that lawful users may rely on crypto mixers to protect sensitive financial information on public blockchains, according to that Treasury report. More than 65 crypto organizations have urged President Trump to intervene, the DeFi Education Fund and the Ethereum Foundation have helped push Storm's legal defense fund past $5 million, and the court has not yet scheduled sentencing on his existing conviction.

Why it matters: The retrial may clarify whether US courts will treat deploying open-source mixer smart contracts as money laundering or sanctions evasion, which could shape legal risk for DeFi developers.

Market Sentiment

Cautiously Bearish, Regulatory-driven, De-risking.

Reason: The DOJ's decision to seek an October retrial on the unresolved money laundering and sanctions conspiracy counts increases perceived legal risk around privacy tools even without an immediate market impact.

Similar Past Cases

In May 2024 a Dutch court convicted Tornado Cash developer Alexey Pertsev of money laundering and sentenced him to around five years and four months in prison based on allegations that the mixer facilitated about $1.2 billion in illicit crypto flows, which showed that courts can hold privacy-tool developers criminally liable for user activity even when the code is open source. (WIRED) The Storm retrial is different because it will test US conspiracy, sanctions, and money transmission theories in a jury trial and unfolds amid explicit, conflicting US policy signals about mixers and "regulation by prosecution."

Ripple Effect

This case could influence how US-based developers, auditors, and front-end operators assess the legal risk of working on privacy-preserving DeFi protocols, because an expansive theory of liability would widen the range of activities that prosecutors can target. The retrial outcome and any written opinions could also guide how regulators and exchanges treat mixer-related tokens and interfaces, which may affect liquidity and access rather than only one project. If the retrial produces a clear ruling that either endorses or sharply limits the government's theory, then observers can watch whether US DeFi teams change hiring, code-publishing practices, or US-facing front ends as a signal of how far the chill on development is spreading.

Opportunities & Risks

Opportunities: If the court grants Storm's Rule 29 motion or a new jury declines to convict on the money laundering and sanctions counts, then the resolution could signal lower perceived legal risk for US-based DeFi and privacy developers and may be a potential entry signal for investors who have waited for greater clarity around mixer-related protocols.

Risks: If the retrial results in convictions on the remaining counts or a broad opinion that treats deploying mixer code as equivalent to running a criminal money transmission or sanctions-evasion scheme, then US builders and investors face higher odds of enforcement pressure on privacy and DeFi projects and this would be a cue to reassess exposure to teams, venues, or strategies that depend heavily on US developers and infrastructure.