Tornado Cash Trial: Will Roman Storm’s Case Break DeFi?

Today Roman Storm may be risking his freedom, but that does not mean DeFi is facing extinction. Some see this case as an attack on privacy. Others point to the billions laundered through Tornado Cash. As always, the truth is somewhere in the middle. This time, the court might try to define that line clearly. The story of this mixer looks more like a symptom than a diagnosis. What matters now is understanding who the justice system wants to punish and what that decision could mean for the future of crypto.

Why Roman Storm’s name became a symbol in the fight over anonymity

Roman Storm, originally from Russia, later acquired U.S. citizenship. With professional experience at companies like Amazon and BitGo, he became widely known in the Web3 world as a co-founder of the crypto project Tornado Cash.

Storm was arrested in August 2023 on charges of money laundering, violating sanctions laws, and participating in activities connected to North Korea’s military program. His co-developer, Roman Semenov (also a Russian citizen), faces the same charges but remains at large, presumably outside the reach of U.S. law enforcement.

The prosecution’s main argument is that Storm and his team deliberately developed a tool designed to obscure the origin of funds. They continued maintaining the project even after learning that Tornado Cash was being used by the Lazarus Group — North Korean hackers under international sanctions.

Authorities argue that Storm was more than just a coder. He played an active role in the platform’s operation and growth. According to the U.S. Department of Justice, Storm managed the user interface, maintained infrastructure, and profited from user transactions. These activities, prosecutors claim, make him complicit in organized crime.

If convicted, Storm faces up to 20 years in prison.

“If I go to jail, DeFi is dead”: how the community reacted

Storm has stated that a guilty verdict in his case could signal the death of decentralized finance itself. In a recent tweet, he wrote: “If I lose, DeFi dies with me.”

His words stirred debate. Some see them as a cry for help. Others view them as an attempt to pressure the court and sway public opinion.

Legal advisor and crypto constitutionalist Katie Biber offered a more nuanced take. She supports the principle that publishing open-source code should not be criminalized but cautioned against oversimplifying the facts: “In the meantime, we urge a return to common sense, due process, and fairness.”

Storm’s statement seems both genuine and manipulative. While the case is undeniably precedent-setting for the crypto space, claiming that a conviction would spell the end of DeFi seems exaggerated. The industry has survived the legal downfall of figures like Sam Bankman-Fried and Changpeng Zhao. Infrastructure and innovation continue to move forward.

Still, crypto mixers have always occupied a more vulnerable position than centralized exchanges. They are designed specifically to obscure financial transactions — making them a regulatory target. To understand why, it helps to look at how these tools work.

What is Tornado Cash, and how do crypto mixers work?

Launched in 2019 on the Ethereum blockchain, Tornado Cash is a decentralized application designed to anonymize cryptocurrency transactions. The mixer works through a few key steps:

1. Deposit into the smart contract. A user deposits crypto into the Tornado contract, with the transaction recorded on the blockchain — but without linking sender and recipient.
2. Waiting period. After deposit, the funds remain in the contract. During this time, they are pooled with funds from other users to obscure their origin.
3. Withdrawal to a new address. The user then withdraws the same amount to a new wallet address. The system breaks the trace between deposit and withdrawal.

Tornado Cash was presented as an open-source project. Its smart contracts were deployed in a way that made them immutable and autonomous. However, users accessed the system via a web-based interface. According to the prosecution, Storm and his team maintained and updated this interface. That involvement in maintaining a user-accessible frontend and potentially benefiting financially from it is what the DOJ sees as grounds for criminal liability.

The platform attracted both privacy-conscious users and malicious actors. While some used it for personal security and freedom from surveillance, others (including the Lazarus Group) exploited it to launder stolen crypto from hacks like Axie Infinity and Harmony.

In August 2022, Tornado Cash was sanctioned by the U.S. Office of Foreign Assets Control (OFAC), and GitHub removed its code repository and suspended developer accounts. Though the smart contracts remained live, the main interface went offline.

By the time it was disabled, over $7 billion had passed through Tornado Cash.

Can open-source code be a legal defense?

Open-source code, in itself, is not a crime. But when such code is used for illegal purposes, legal and ethical questions arise. Can the director of a shovel factory be prosecuted if someone uses a shovel to commit murder? Under traditional law, the answer is no. But in the much murkier waters of crypto and decentralized ecosystems, that distinction blurs. 

This is the crux of the Tornado Cash case.

Supporters argue that Storm simply published open-source software — just like countless other developers. Tornado was fully autonomous. There was no central server, no kill switch. All operations were executed through blockchain-based smart contracts. This is similar to prosecuting the creator of ZIP software because someone used it to share pirated files.

Opponents disagree. They point out that Tornado was not a neutral piece of code. There was an active team, a website, regular updates, and user support. Most significantly, it became a go-to tool for laundering vast sums, including funds linked to cyberattacks and international crime.

Even legal experts are divided. Paradigm, a crypto investment firm, submitted a statement in support of dismissing the charges against Storm. They argue that writing and publishing open-source code should not be treated as a crime. In their view, Storm did not run a business or control a service in the traditional sense, and applying criminal law here could set a dangerous precedent. The court now has to operate in a legal gray zone. Any decision it makes could affect the entire sector.

Because the U.S. follows precedent-based law, a ruling in the Tornado Cash case could be cited in future prosecutions involving crypto tools and dApps. It could shape the legal framework for years to come.

Some critics go further. They liken the DOJ’s actions to a modern-day inquisition – targeting developers instead of catching hackers. Still, there is a key distinction. Tornado Cash was not built around a product or a service – it was built around the mechanism of financial obfuscation. That, in the eyes of regulators, makes it uniquely dangerous.

You may also be interested in this article: Do Contemporary Regulators Draw from Inquisition Practices?

Postscript: When code is not just code

Regardless of whether one sympathizes with the developers or views Tornado Cash as a tool for laundering, one fact cannot be overlooked. Russian developers were the ideological, technical, and organizational drivers behind Tornado Cash. This matters – not only because of their origin, but because of the geopolitical context.

It is no secret that Moscow, Tehran, and Pyongyang have long viewed cryptocurrency as a way to bypass sanctions. This is not speculation. It’s supported by evidence from multiple investigations, including the Lazarus Group’s activity. The links between Russian interests and North Korean hackers are no longer surprising to those who track cybercrime.

It is fair to assume that if Tornado Cash had been developed by a team with no ties to Russia or other rogue states, the court might approach the matter with more flexibility. Especially since other crypto mixers still operate today without such scrutiny or legal pressure. 

For more details, see What mixers still operate after the Tornado Cash shutdown?

In this case, however, we are not dealing with just technology. We are looking at an entire ecosystem, deeply embedded in shadow finance tied to authoritarian regimes. That inevitably influences how justice is applied.

Ultimately, the question is not only about open-source code. It’s about who writes that code — and why.