DOJ Defends Tornado Cash Prosecution Amid Policy Shifts

Federal prosecutors are defending their case against Roman Storm, co-founder of the cryptocurrency mixer Tornado Cash, as they appeal a recent ruling in a similar case involving Bitcoin Fog. In an Oct. 5 filing, they asked Judge Katherine Polk Failla to reject Storm’s challenge to the venue for his trial on money-laundering and money-transmission conspiracy counts. The prosecutors argue that Storm’s involvement in Tornado Cash, which obscures transaction trails, makes him liable for criminal activity.

The case comes amid policy shifts from the Treasury Department, which recently withdrew a proposal for enhanced reporting requirements for cryptocurrency mixers. The withdrawal, filed Oct. 5, cited concerns about a “chilling effect on legitimate activity” and burdens on financial institutions. However, the policy change does not affect Storm’s ongoing legal battle, which hinges on whether his software development crossed into criminal territory.

Storm, who has been outspoken about the case, criticized the prosecution on social media, describing potential imprisonment as punishment “for writing code.” His retrial is scheduled for April 26, 2027, following an August 2025 conviction on one count of money-transmission conspiracy, which carries a maximum sentence of five years. Prosecutors are relying on a recent D.C. Circuit decision in United States v. Sterlingov to support their venue argument, claiming that serving a customer in Manhattan justifies the trial location.

The Department of Justice (DOJ) has also adjusted its stance on mixer prosecutions, directing prosecutors to avoid targeting mixers for users' conduct or unwitting regulatory violations. However, the policy excludes cases involving funds known to come from crime or intended for unlawful activity. The DOJ maintains that Storm knowingly participated in criminal activity by building and maintaining Tornado Cash, while Storm contests the criminal treatment of his developer work.