The convincing of the Tornado Cash co-founder and developer of the Roman Storm can set a “dangerous” preceding for developers and privacy, legal observers say in the crypto space.
The storm was found to be guilty of The operation of an unlicensed business that sends money On Wednesday, August 6. The crime brings a maximum sentence of five years. The jury could not reach a consensus on conspiracy charges to make money on launching and conspiracy to violate US sanctions. Federal prosecutors can still try him on these two charges.
While the storm has not yet faced the censorship, other Crypto-related cases, including former FTX CEO Sam Bankman-Fried and Onecoin co-founder Karl Greenwood, have been tested and found guilty in both district and graduated in prison time.
Legal professionals and industries in the industry are devastating judgments, saying it sets a dangerous precedent for open-source developers and has implications for user privacy.
Roman Storm is convicted amidst concerns with remembrance of money money
Created in 2019, Tornado Cash was a cryptocurrency mixer and a privacy tool that masked the source of funds. The tool, founded by Storm, Alexey Pertsev and Roman Semenov, quickly drawn the attention of Delisting This in March.
Pertsev was arrested in August 2022 in the Netherlands, where he faced a legal battle of himself. The storm was arrested in the US just a year later, while Semenov remains large and is on the list of the most desired Federal Bureau of Investigation’s list.
Some maintain that the Tornado Cash Devs may not or should not be held responsible for the actions of platform users, especially if that platform, as happened in Tornado Cash, has no care or control of the funds. US critics and governments, in particular, maintain that they are responsible.
Judge Katherine Failla declined A movement to delete the case in September 2024, stating that Tornado Cash qualified as a currency transmitter, regardless of the control of those who developed funds. As such, they should implement the same anti-money laundering and know your customer steps like any other platform.
The privacy-focused community is about to obey the case, and now, with the storm found guilty, there is concern for what it means for decentralized finances (DEFI) and software development.
The Blockchain Association, a lobby of the crypto industry in Washington, Says On Wednesday the ruling “sets up a dangerous preceding for open-source software developers.”
The association also identified a short Amicus (a filing made in support of a party in a lawsuit, in this case, Tornado Cash) which noted that the storm did not enable crypto control over the protocol.
Related: Roman Storm’s early urge for code leads to Silicon Valley, Tornado Cash – and a guilty verdict
“The Roman Storm built a privacy tech operating Nothing His care/control over the funds of tornado cash users. )
The Blockchain Association further said that the verdict not only threatens open-source software but also “fundamentally incorrect money transmitter laws.” It concluded that this prosecution is “criminals of the browsers, messaging apps, or any software that is misused by evil actors, who take America’s leadership in tech seriously.”
The Solana Policy Institute Nakasa said That belief means that developers can deal with criminal responsibility even if they build non-custodial, open-source protocols that eliminate control through unchanged intelligence contracts and unable to control misuse.
According to the group, it represents a “major misunderstanding” of decentralized technology and how it can be regulated.
What was ahead of the development of storm and open-source software?
While the crypto industry is far from the outcome, not all are lost.
Andrew Rossow, policy and public affairs attorney and principal in Rossow Law, told Cointelegraph that the verdict “is not just about a person or a mixer. This is a referendum to the individual agency at the age of open-source code.”
Rossow noted that while the verdict “releases a shadow” in the Developer’s liability, the fact that the jury has not reached a verdict on the other two charges that “promotes the standard that the code itself is not ‘criminal’-especially to censorship-resistants, without permission environments.”
The question of “If the creators of neutral software should bring criminal responsibility for its misuse”. According to Rossow, the case also exposes the current inability of the justice system to understand and judge decentralized technology.
And yet, “the silence of the jury on the most difficult questions is the opening for the industry to speak.”
Industry groups are planning to do that. The Solana Policy Institute is Pressing For Congress to pass The Clarity Act, which, among other things, will provide legal meaning and carve-outs for some aspects of the Defi activity.
The Blockchain Association Nakasa said That the administration of US president Donald Trump has to stop “regulation by prosecution,” a reference to the more commonly used “regulation by implementation” that describes the crypto regulators’ approach under former President Joe Biden.
There is also the possibility of an appeal. “The fight is not finished,” Says The Crypto Council for Innovation (CCI) CEO Ji Kim. “An appeal to the second circuit awaits. Regulation clarity is also required to clarify the meaning of a money transmitter,” he said.
CCI, another lobby group of the crypto industry, Called An appeal “necessary,” as the blockchain urges the same.
The storm did not make public statements following his conviction. It is still unknown if he will ask for an appeal, and his date of pumping is pending.
The crypto industry and its supporters clearly do not take the verdict lying. One day after the decision, the Ethereum Foundation promised to match $ 500,000 to the continuous legal cost of the storm. Hsiao-Wei Wang, co-executive director of the foundation, said, “Privacy is normal, and the writing code is not a crime.”
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