The U.S. Department of Justice has dropped a portion of the criminal case against Roman Storm, co-founder of the crypto mixer Tornado Cash, weeks ahead of his trial set for July 14. In a letter dated May 15, Acting U.S. Attorney Jay Clayton informed Judge Katherine Polk Failla of the Southern District of New York that the government will no longer pursue part of the charge related to operating an unlicensed money transmitting business. Specifically, prosecutors will not proceed under Title 18 U.S. Code § 1960(b)(1)(B) — the part of Count Two of the indictment that alleges Storm failed to comply with registration requirements for money transmitting businesses. However, the DOJ confirmed that it will continue to pursue charges accusing Storm of conspiring to commit money laundering, conspiring to violate the International Emergency Economic Powers Act, and conspiring to transmit funds derived from unlawful activity under the remaining portion of Count Two. In the letter, Clayton stated: “After review of this case, this Office and the Office of the Deputy Attorney General have determined that this prosecution is consistent with the letter and spirit of the April 7, 2025 Memorandum from the Deputy Attorney General .” That memo , authored by Deputy Attorney General Todd Blanche, directed the DOJ to end its practice of “regulation by prosecution” in crypto cases. It emphasized the agency should not bring criminal cases for technical regulatory violations — such as failure to register — especially when platforms or developers may not be directly responsible for user activity. You might also like: Tornado Cash co-founder seeks dismissal of US crypto-laundering charges Storm was charged alongside fellow founder Roman Semenov in 2023 for allegedly helping criminals, including North Korea’s Lazarus Group, launder illicit funds through Tornado Cash. Tornado Cash is a crypto mixer that anonymizes blockchain transactions, making it harder to trace stolen or sanctioned assets. It works by pooling users’ crypto deposits and redistributing them to different addresses, breaking the on-chain link between sender and recipient. Storm has pleaded not guilty and sought to have some charges dismissed , arguing they infringe on his First Amendment rights. Although his trial was previously delayed, it is now scheduled to begin this summer. A third co-founder, Alexey Pertsev, was arrested in Netherlands in 2022 on suspicion of facilitating money laundering through Tornado Cash. He was later charged and, on May 14 last year, a Dutch court found him guilty and sentenced him to five years and four months in prison. In February this year, he was released under electronic monitoring to prepare this appeal. The case has sparked a broader debate over developer liability and the legal boundaries of open-source software in crypto. You might also like: Tornado Cash creators deny laundering $1b for North Korea hackers
