DOJ Pushes Forward on Tornado Cash Case as FinCEN Backs Away from Mixer Proposal

On October 5, 2026, the US Department of Justice and the Financial Crimes Enforcement Network (FinCEN) took contrasting stances on crypto privacy tools. The DOJ filed a new letter in the case against Roman Storm, co-founder of Tornado Cash, pushing back on his venue challenge. Meanwhile, FinCEN withdrew its 2023 proposal to treat international crypto mixing as a primary money laundering concern.

Storm’s legal battle began with his arrest in August 2023. He was convicted in August 2025 of operating an unlicensed money transmitting business, a charge that could result in a five-year sentence. However, the jury deadlocked on more serious conspiracy charges related to money laundering and sanctions violations, which carry up to 20 years each. His retrial, initially set for October 26, 2026, has been rescheduled to April 26, 2027, with pretrial activities beginning in February 2027. Storm’s defense has also filed a Rule 29 motion for acquittal on all counts, with oral arguments heard in April 2026 but no ruling yet issued.

FinCEN’s withdrawal of its proposal was driven by concerns that the broad definition of mixing could discourage legitimate uses of privacy tools and impose substantial reporting obligations. The move aligns with earlier White House recommendations on the privacy functions of mixers. Despite FinCEN’s shift, prosecutors remain firm in their stance against Tornado Cash, alleging it facilitated over $1 billion in laundered funds, including those linked to North Korea’s Lazarus Group.

The case’s next critical dates include the pending Rule 29 ruling, the resolution of the venue dispute, and the start of pretrial activity in February 2027 ahead of the retrial.