DeFi Danger Zone: Roman Storm Issues Stark Warning to Developers as DOJ Targets Protocol Code
Code equals culpability? The Department of Justice draws its legal crosshairs on decentralized finance builders.
The New Developer Reality
Roman Storm's chilling alert echoes across GitHub repositories and Discord channels—write protocol code at your own legal peril. The DOJ's expanding interpretation of securities law now treats lines of code as potential criminal conspiracy.
Smart contracts suddenly look pretty dumb when federal prosecutors come knocking. Developers who thought they were building financial infrastructure now face the terrifying prospect of becoming financial felons.
Regulatory Roulette
The legal landscape shifts beneath developers' feet as automated protocols get treated like traditional financial intermediaries. That 'decentralized' ethos provides cold comfort when subpoenas start flying.
Building permissionless systems now requires begging for permission from regulators who barely understand the technology. Another brilliant case of financial innovation outpacing financial regulation—until it doesn't.
The hammer drops hardest on those who thought they were beyond its reach. Welcome to the great decentralization paradox: you can remove the middleman, but you can't escape the man.
TLDR
- Roman Storm was convicted for operating an unlicensed money transmission business.
- The DOJ did not secure a unanimous jury verdict on two other charges.
- Storm claims no control over Tornado Cash as it’s a decentralized protocol.
- DOJ official said writing code without ill intent is not considered a crime.
The recent conviction of Tornado Cash developer Roman Storm has raised serious concerns in the decentralized finance (DeFi) community. Storm’s legal situation is prompting open source developers to question their own legal safety. As he asks, “Can you be so sure you won’t be charged by the DOJ for building a non-custodial protocol?” the entire crypto development space is paying close attention.
Concerns Rise Over Legal Risk to Open Source Developers
Roman Storm, known for co-developing Tornado Cash, a decentralized privacy protocol, is raising alarm about legal risks for DeFi developers. In a public statement, he questioned whether anyone building non-custodial platforms can be certain they won’t face charges from the U.S. Department of Justice.
Storm pointed to his own ongoing case, where the DOJ charged him with conspiracy to operate an unlicensed money transmission business. He warned that prosecutors could claim any non-custodial service should have been built as a custodial one. This argument was used in the case against him.
Storm filed a motion for acquittal on September 30, stating that he had no control over the Tornado Cash protocol. According to court documents, “Our company does not have any ability to affect any change, or take any action, with respect to the Tornado Cash protocol — it is a decentralized software protocol that no one entity or actor can control.”
His comments have triggered concern among developers who build decentralized tools but may now worry they are at legal risk despite their software being open source and non-custodial.
Legal Case Sets a Worrying Precedent
Storm’s trial ended in August, with the jury finding him guilty on one of three counts. He was convicted of operating an unlicensed money transmission business. However, the jury could not agree on the remaining two counts related to money laundering and sanctions violations.
Legal experts say this sets a new precedent. Storm was found guilty not for financial activity, but for building a tool that others may have used to MOVE funds. The outcome has created confusion in the open-source and crypto development communities about where the legal lines are drawn.
Jake Chervinsky, chief legal officer at the Variant Fund, said on X, “If the TRUMP administration wants the USA to be the crypto capital of the world, then the DOJ must not be allowed to retry the two deadlocked charges.” The jury’s inability to convict on those charges has left the door open for possible future legal battles.
DOJ Says Writing Code Alone Is Not a Crime
Following the trial, the Department of Justice shared statements to ease growing concerns among developers. In August, DOJ official Matthew Galeotti said the department WOULD not pursue a retrial of Storm and would not target similar cases.
Speaking at the American Innovation Project Summit, Galeotti stated, “Our view is that merely writing code, without ill intent, is not a crime.” He added, “The department will not use indictments as a law-making tool. The department should not leave innovators guessing as to what could lead to criminal prosecution.”
Despite these comments, developers remain cautious. The line between writing code and being responsible for how it is used remains unclear in the eyes of many.
The Future of DeFi Development Faces Legal Questions
Storm’s question—”Can you be so sure you won’t be charged by the DOJ?”—remains unanswered for many in the DeFi community. The decentralized nature of protocols like Tornado Cash is designed to remove control from any one individual. However, recent legal moves suggest that intent and design may not be enough to shield developers from prosecution.
Without clear legal protections for open source developers, many fear the risk of retroactive charges. Until laws are clarified, DeFi builders may have to navigate uncertainty about how their code could be interpreted under U.S. law.
