Roman Storm Faces Trial as U.S. Drops Tornado Cash Lawsuit—What’s Next for Crypto Privacy?

The U.S. government just folded its hand against Tornado Cash—but Roman Storm’s legal nightmare is far from over. Here’s why this case could redefine privacy in DeFi.

### The Fallout: A Win for Crypto—or Just Regulatory Theater?

While the DOJ quietly shelved its lawsuit against the mixing protocol, Storm remains trapped in a legal limbo that smells like a warning shot to developers. Privacy tools? Still in regulators’ crosshairs. ‘Innovation-friendly’ policies? Try ‘innovate until we decide you’ve gone too far.’

### Behind the Headlines: Why This Matters

Tornado Cash wasn’t just another protocol—it was a litmus test for financial autonomy. Now, with Storm’s trial looming, the crypto world watches as the U.S. tries to jail a coder for writing software. Bonus irony: the same regulators who can’t track $10B in COVID relief fraud suddenly became blockchain forensic experts.

### The Bottom Line

Storm’s trial isn’t about one developer—it’s about whether code is speech, and who gets to control the financial rails. Meanwhile, Wall Street’s still laundering billions the old-fashioned way: with offshore accounts and a wink from the SEC.

TLDR

• Tornado Cash sanctions dropped, but co-founder Roman Storm heads to trial.

• Treasury ends lawsuit over Tornado Cash, yet DOJ still targets its developer.

• OFAC lifts sanctions on Tornado Cash; Roman Storm faces criminal charges.

• Sanctions battle over Tornado Cash ends, but Storm’s trial begins next week.

• Tornado Cash cleared by Treasury, but co-founder Storm still faces the DOJ.

The U.S. Treasury Department has formally ended its legal battle over sanctions against Tornado Cash. The Court of Appeals for the Eleventh Circuit approved a joint motion to vacate the case. This move followed the Treasury’s March decision to lift economic sanctions against the Ethereum-based crypto mixer.

JUST IN: 🇺🇸 U.S. government drops appeal in Tornado Cash lawsuit. pic.twitter.com/asOM2CDl66

— Whale Insider (@WhaleInsider) July 7, 2025

The government and advocacy group Coin Center both agreed that the case was moot after the removal of sanctions. This agreement concludes their appeal over Tornado Cash’s blacklisting. However, despite the case ending, Tornado Cash developer Roman Storm still faces criminal prosecution in a separate legal process.

The conclusion of this appeal signals a shift in the government’s stance on the sanctioning of crypto tools. The Department of Justice continues its pursuit of individual accountability. Roman Storm’s trial remains scheduled for next week in New York.

Tornado Cash Lawsuit Ends After OFAC Withdrawal

The Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Tornado Cash in August 2022. It claimed the platform was used to launder stolen funds by North Korea’s Lazarus Group. In March 2025, OFAC reversed this MOVE and officially removed the crypto mixer from its sanctions list.

The government agreed to end its appeal with Coin Center. The Eleventh Circuit then vacated the original ruling and ordered the case dismissed. Coin Center had challenged the legality of sanctioning Tornado Cash’s smart contracts.

The court had previously shown skepticism toward OFAC’s interpretation of sanctions law. It ruled the government had overreached by labeling Tornado Cash’s Immutable smart contracts as sanctionable property. As a result, legal pressure on the Treasury eased, prompting the decision to close the case.

Roman Storm Faces Trial Despite Case Closure

While the Treasury dropped its appeal, Roman Storm’s legal troubles continued. Storm faces federal charges including conspiracy to launder money and sanctions violations. The Department of Justice confirmed its intention to proceed with trial preparations.

Storm co-founded Tornado Cash allows users to mix cryptocurrency for privacy purposes. Prosecutors claim he knowingly enabled criminal transactions and operated an unlicensed money transmission service, and they allege that he profited from those illegal activities.

Storm’s legal team is preparing to contest those claims in court. He has yet to confirm if he will testify in his defense. His trial in New York’s Southern District Court is expected to begin within the coming week.

Co-Founders Face Diverging Legal Outcomes

While Storm awaits his trial, his co-founders face separate outcomes. Alexey Pertsev was convicted in the Netherlands and sentenced to 64 months in prison. Meanwhile, Roman Semenov remains at large and has not been apprehended by authorities.

Dutch prosecutors argued that Pertsev enabled money laundering through Tornado Cash’s decentralized system. The court found the platform’s autonomous code structure insufficient to shield developers from liability. His conviction highlighted international divisions in regulating blockchain technology.

Semenov’s status remains unclear, and no recent updates have confirmed his whereabouts. His absence leaves another unresolved thread in the Tornado Cash case. Authorities have not disclosed further steps in his case at this time.