Tornado Cash Co-Founder Roman Storm Convicted: 5-Year Sentence Looms Amid Privacy and DeFi Concerns

- Roman Storm convicted of operating an unlicensed money-transmitting business, setting a controversial precedent. - Verdict sparks widespread concerns for privacy, DeFi, and open-source software liability. On August 6, 2025, a jury found Roman Storm, co-founder of the privacy-focused crypto platform Tornado Cash, guilty of conspiring to operate an unlicensed money-transmitting business. This verdict marks a pivotal moment in the cryptocurrency industry, as the conviction has ignited debate around its potential chilling effects on decentralized finance (DeFi), open-source development, and privacy-enhancing technologies. Storm faces a potential sentence of up to five years for this charge. However, according to a Cointelegraph report on August 8, 2025, the jury did not reach a consensus on additional accusations, including conspiracy to commit money laundering and conspiracy to violate U.S. sanctions. Federal prosecutors may choose to retry him on these unresolved counts, which could amplify the case’s impact. The verdict has drawn sharp criticism from legal and industry experts. On August 8, the Blockchain Association called the ruling a "dangerous precedent for open-source software developers," emphasizing that the non-custodial Tornado Cash protocol did not give Storm control over user funds. In a similar response, the Solana Policy Institute argued the conviction reflects a "fundamental misunderstanding" of decentralized technology and urged an appeal alongside legislative efforts to close regulatory gaps. Advocacy groups, including the Blockchain Association and the Solana Policy Institute, are advancing legislative initiatives like the CLARITY Act to establish clear legal guidelines for DeFi activities. Meanwhile, the Ethereum Foundation pledged to match $500,000 in donations for Storm’s legal defense, showcasing the crypto community’s unified stance. On August 8, Ethereum Foundation Co-executive Director Hsiao-Wei Wang underlined this support, stating, "Privacy is normal, and writing code is not a crime." According to CoinMarketCap data on August 8, Ethereum (ETH) was trading at $3,963.75 as of 15:09 UTC, a 3.81% increase in its 24-hour trading volume.