United States v. Storm

Will Judge Failla let the Tornado Cash conviction stand?

Court: U.S. District Court, S.D.N.Y.
Division: Trial Court

Where the case stands

Rule 29 acquittal motion still undecided after April 2026 oral argument; Judge Failla has pushed the retrial on the two hung counts from Oct 2026 to April 26, 2027 to accommodate the pending motion

Background

Co-founder and developer of the Tornado Cash crypto-mixing protocol. The flagship U.S. prosecution testing whether writing and deploying open-source privacy code can be a crime — followed intensely by the crypto industry and civil-liberties groups.

Charges

Convicted Aug. 6, 2025: conspiracy to operate an unlicensed money-transmitting business, 18 U.S.C. § 1960(b)(1)(C) (max 5 years)
Jury hung (partial mistrial) on conspiracy to commit money laundering and conspiracy to violate IEEPA sanctions

The arguments

Prosecution/State: Storm "not only facilitated but also profited from money laundering"; Tornado Cash allegedly processed over $1B in illicit funds, including hundreds of millions for North Korea's Lazarus Group.

Defense: Tornado Cash is a lawful, non-custodial "neutral tool"; failing to prevent misuse is not agreeing to assist it; publishing code is protected by the First Amendment; the Supreme Court's Cox Communications ruling supports the neutral-tool defense.

The record

Illicit-flow tracing. Government blockchain analysis presented at trial tracing >$1B in allegedly illicit funds through the protocol, including Lazarus Group hacks.
Profit evidence. Evidence that Storm profited from the protocol's operation, offered against the neutral-tool defense.
Protocol architecture. Expert testimony on Tornado Cash's non-custodial smart-contract design — the core of the defense case.

The line-setting read at the time this market opened

Reported courtroom read: Failla said the conviction's stability is "very much in play." DeFi Education Fund counsel criticized the government's technical presentation and expects the case to continue to a late-2026 retrial either way.

Awaiting decision — Judge Failla ruling on the acquittal/new-trial motions; final pretrial conference April 20, 2027; retrial of hung counts April 26, 2027 The ruling is posted here, and on the board, the moment it's confirmed by two or more independent news organizations.

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Sources

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