Tornado Cash Co-founder Found Guilty: A Watershed Moment for Crypto Regulation

The hammer drops on privacy tech as Tornado Cash co-founder faces conviction—signaling regulators' tightening grip on decentralized finance.

Privacy vs. Prosecution: The New Crypto Fault Line

Jurors didn’t buy the 'just code' defense. This verdict shreds the myth of complete anonymity in DeFi—while TradFi bankers quietly sip champagne over another 'wild west' narrative confirmed.

The Precedent No One Wanted

Prosecutors now have a playbook for targeting devs. Expect more subpoenas, more frozen GitHub repos, and VCs suddenly remembering they love 'compliant innovation.'

What’s Next for Crypto’s Legal Frontier?

Exchanges are already delisting privacy coins faster than you can say 'AML.' Meanwhile, Monero miners keep hashing away—because some ideologies (and darknet markets) don’t do plea deals.

The irony? Wall Street’s laundering billions through fines-as-a-cost-of-business models. But in crypto, they’ll jail the infrastructure.

Legal Complexity Meets Blockchain Innovation

Storm’s defense claimed he never intended Tornado Cash to aid illegal activity. When he learned North Koreans were involved, they “dropped F-bombs,” not champagne. Besides, jurors seemed overwhelmed by the technicalities. 

They were curious about whether Storm had to engage with foreign authorities and how OFAC sanctions relate to blockchain wallets. These inquiries highlighted the legal system’s ongoing challenges in adapting to decentralized technology.

Vitalik Buterin, Ethereum’s co-founder, backed Storm. “It would violate basic honor… In ethereum we protect our own,” he said. Moreover, the DeFi Education Fund defended Storm’s right to build open-source software, stating such developers “do not exercise control or custody over user assets.”

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

By all means, this case has the possibility of changing the judiciary’s perspective on open-source crypto developers. It sets such a dangerous situation whereby merely writing code could be criminalized. The outcomes are not only on Storm, but they could have an effect on digital privacy, blockchain innovation, and user rights.

Also Read: India’s ED Seizes ₹42.8 Cr in Chirag Tomar Crypto Fraud