On Jan. 22, Roman Storm, a co-founder of the privacy-focused cryptocurrency protocol Tornado Cash, shared his thoughts about the ongoing money-laundering conspiracy prosecution against him on X. Members of the crypto dev community showed their support. My name is Roman Storm, and I am one of the founders of Tornado Cash, a non-custodial privacy protocol. I am being prosecuted for writing open-source code that enables private crypto transactions in a completely non-custodial manner. This prosecution represents a terrifying… — Roman Storm 🇺🇸 🌪️ (@rstormsf) January 22, 2025 Over the years, Tornado Cash has whipped up a storm of legal trouble. This decentralized privacy tool, which allows users to keep their crypto transactions hush-hush, turned into a destination for bad actors to launder ill-gotten gains, the U.S. Treasury alleged. But Tornado Cash isn’t the only privacy-focused crypto project targeted by the U.S. government. Read on for a deeper look at the various legal battles involving such projects as Monero and other privacy-focused coins. Table of Contents Storm’s speech and public reaction Why do many expect the case to be closed? A history of legal clashes Storm’s speech and public reaction Storm, Tornado Cash co-founder, is believed to have spent over a million dollars in legal costs and still has to continue the battle. Tornado Cash’s other co-founders, Roman Semenov and Alex Pertsev, faced prosecution, too. But on Jan. 22, Storm spoke out, claiming that prosecuting him for his work on the open-source code for a non-custodial protocol that enables private transactions is a criminalization of privacy. In the post, Storm warns that this prosecution creates a precedent for criminalizing software developers. He provides details, saying that he’s facing up to 45 years in prison for operating an unlicensed money-transmitting business, conspiracy to commit money laundering and sanction evasion. On top of Storm’s own words, he included statements by multiple professionals from the blockchain industry, lawyer Keri Axel, and politician and entrepreneur Vivek Ramaswamy, who called the sanctions against Tornado “illegal and unconstitutional.” (On Jan. 21, a court ruling seemingly overturned the U.S. sanctions, ruling Tornado’s smart contracts are not “property” under U.S. law.) Ethereum co-founder Vitalik Buterin also raised his voice in support of Tornado Cash. “You created Tornado in significant part because of my suggestion that it is something worth building,” Buterin said. “It would violate basic honor for me to do that, and then fail to support you in your hour of need. In Ethereum we protect our own, and uphold our honor.” The Tornado Cash transaction data mixer works via the Ethereum Virtual Machine. You created Tornado in significant part because of my suggestion that it is something worth building. It would violate basic honor for me to do that, and then fail to support you in your hour of need. In Ethereum we protect our own, and uphold our honor. Milady — vitalik.eth (@VitalikButerin) January 22, 2025 Why do many expect the case to be closed? Some observers of the case expressed confidence that prosecutors may drop the charges. After all, newly sworn-in U.S. President Trump pardoned Ross Ulbricht — founder and operator of Silk Road, an infamous online black market that operated on the dark web from 2011 to 2013. Storm and other crypto professionals currently facing charges hope that the Trump administration will be especially lenient toward their own. Elon Musk, for example, told X users that he would speak to Trump on behalf of early Bitcoin investor Roger Ver, who is currently facing charges from the U.S. Department of Justice on mail fraud, tax evasion, and filing false tax returns. There is another reason why, under the new Trump administration, Storm could hope for a favorable outcome. On Jan. 23, Trump issued an executive order banning federal agencies from pursuing work on a central bank digital currency, or CBDC. This move signals the White House’s support for private transactions over those that might be fully auditable by regulators, bodes well for Tornado. Read more: Trump signs executive order related to crypto A history of legal clashes Privacy-focused cryptocurrencies, mixers, and private crypto wallets have a history of clashes with regulators like the Financial Crimes Enforcement Network (FinCEN) who often view such projects as money-laundering tools. For instance, in 2024, the Samourai Wallet co-founders Keonne Rodriguez and William Lonergan Hill were charged with money laundering and unlicensed money-transmitting business. The wallet website was seized. According to U.S. Attorney Damian Williams, the founders of the Samourai Wallet knowingly participated in laundering millions of dollars associated with the Silk Road and Hydra black markets. Critics of the case argue that their role was solely in creating and maintaining the wallet that conceals the transaction data. Samourai Wallet founders Keonne Rodriguez and William Lonergan Hill face up to 25 years in prison. Just like Tornado Cash, Samouri Wallet was non-custodial. In the past, the government has taken down the largest custodial mixers as well. The list includes Bitcoin Fog, Helix, Blender, Sinbad, and Chip Mixer. As for digital money, analysts at Kaiko revealed last year that market liquidity for privacy tokens — including Monero ( XMR ), Zcash ( ZEC ), and DASH — has reached all-time lows as crypto exchanges keep removing these assets from their listings due to the ongoing crackdown on crypto projects using mixing tools. Zcash was created with the help of former National Security Agency contractor and whistleblower Edward Snowden. As of today, it is hard to tell if the narrative and treatment of privacy coins and mixer services under the Trump administration will change. Storm’s next court date is April 14, 2025. Read more: Monero price could surge 140% after Tornado Cash ruling
