Compass Investments

– A federal judge heard arguments in favor of dropping the charges against Roman Storm, co-founder of Tornado Cash, but signaled that she may not be ready to issue a verdict soon.

Judge Katherine Polk Failla of the Southern District of New York presided over a hearing on Storm’s motion for a judgment of acquittal under Rule 29 of the CCP, which allows the court to dismiss a case if the prosecution’s evidence is legally insufficient. Storm was found guilty last August of conspiracy to engage in unlicensed money transfer activities, but the jury was unable to reach a unanimous verdict on two more serious counts – conspiracy to launder funds and conspiracy to violate U.S. sanctions – resulting in a partial verdict. Storm’s attorneys insisted that Tornado Cash was a legitimate protocol that did not require incarceration, and his work supporting the software did not make him liable for criminals who also used the platform. From the beginning of the trial, the defense has argued that Storm had no real control over the transactions and never intended for the protocol to be used by criminals. They also noted that denying the acquittal effectively criminalizes the publication of decentralized software, violating the First Amendment.

Representatives of the prosecution parried, arguing that Storm not only facilitated but also benefited from money laundering through the protocol. Prosecutors claim that Tornado Cash processed over $1 billion in illicit funds, including hundreds of millions linked to the North Korean group Lazarus. Patrick Wilson, general counsel for the Solana Policy Institute, called the prosecution’s broad interpretation

troubling,

warning that it could lead to the recharacterization of legitimate activity as illegal if the non-custodial tool is used heavily by criminals.

Amanda Tuminelli, executive director of the DeFi Educational Foundation, who was present at the meeting, said she believes the government is still not fully aware of the technology. She added that while Failla asked insightful questions, it was difficult to predict her final decision. With the judge focused on setting possible dates for a new trial — late 2026 — Tuminelli believes the case will continue.

In the event of an acquittal verdict from Judge Failla, prosecutors will have to decide whether they will contest the decision or drop the charges. If the prosecution declines to proceed, Storm faces sentencing on the already proven charge, which carries up to five years in prison, and a new hearing on the remaining two counts, which prosecutors have requested in October.