U.S. Drops Part of Tornado Cash Case, But Will Press Ahead on Key Charges

U.S. prosecutors said Thursday they will not pursue part of the criminal case against Tornado Cash co-founder Roman Storm, ahead of his scheduled trial in July, but plan to move forward on charges of money laundering and sanctions violations. The U.S. Attorney’s Office for the Southern District of New York said in a court filing that it would drop part of the allegation that Storm operated an unlicensed money transmitting business, though it will continue pursuing other charges tied to money laundering, unlicensed money transmission, and violating the International Emergency Economic Powers Act (IEEPA). The move comes as the Department of Justice (DOJ) adopts a narrower enforcement approach under the Trump administration, aligning with an April policy memo that called for ending “regulation by prosecution.” The memo instructed federal prosecutors to avoid bringing cases that impose financial regulations through criminal charges, leaving such oversight to civil regulators. Instead, the DOJ said it would focus its efforts on cases involving investor harm or criminal abuse of crypto, such as terrorism financing or hacking. That shift excludes many registration-based violations against crypto intermediaries, while still targeting platforms used for illicit purposes. Roman Storm was indicted in 2023, accused of helping develop and operate Tornado Cash , a which was sanctioned by the Treasury’s Office of Foreign Assets Control (OFAC) in 2022. Those sanctions were removed in March 2025. Storm has challenged the charges on First Amendment grounds, arguing that building open-source software should not be criminalized. His trial is currently set to begin on July 14 after earlier delays. Tornado Cash is a decentralized protocol that provides privacy for transactions on the Ethereum blockchain, allowing users to make anonymous transfers. While private financial transactions are legal, Tornado Cash has been exploited by some users for money laundering. Earlier this year, the Ethereum Foundation donated $1.25 million to support the legal defense of Tornado Cash developer Alexey Pertsev as he prepares to appeal his money laundering conviction in the Netherlands. The 31-year-old Russian national was sentenced to 64 months in a Dutch prison in May 2024 after authorities alleged he had “a habit of committing money laundering”. Prosecutors argued that he should have been aware that illicit funds were flowing through the Tornado Cash platform. One of the judges characterized Tornado Cash as primarily a tool for criminal activity , which played a key role in Pertsev’s conviction.