The crypto industry praised a memo signed by Deputy Attorney General Todd Blanche directing the Department of Justice to end “regulation by prosecution.”
The Tornado Cash developer’s trial this summer is evidence that the crypto industry is still severely lacking regulatory clarity.
When European police staged another coordinated sweep against crypto mixers this autumn, most people saw a familiar headline and scrolled on. But every seizure, every frozen server rack, every compressed hard drive pushed into an evidence van has the potential to change how Bitcoin actually moves. Mixers (tools that allow users to break the traceable […]
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The DOJ filed its own post-trial motion last week, pushing back against Storm's motion for acquittal.
On Oct. 31, 2025, the Radiant exploiter transferred approximately 5,411.8 ETH to Tornado Cash, a move worth roughly $20.7 million. Nine days earlier, the same cluster had moved approximately 2,834.6 ETH, equivalent to $10.8 million, after staging funds across chains and through swaps before the mixer. Neither burst looked hurried. Both looked like a careful […]
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The Solana Policy Institute (SPI) has pledged $500,000 to the legal defense of Tornado Cash developers Roman Storm and Alexey Pertsev, according to an Aug. 28 statement. Storm and Pertsev helped create Tornado Cash, an Ethereum-based privacy protocol that allows crypto transactions to be mixed and anonymized. After deployment, the developers relinquished control of the […]
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After two Allen charges and four days of deliberation, a New York jury could not reach a unanimous agreement on the conspiracy to commit money laundering charge or the sanctions evasion charge.
The Roman Storm trial has hit a snag after four days of jury deliberations, with jurors informing the court that they remain deadlocked on certain charges, according to an Aug. 6 court reporting from Inner City Press. Judge Katherine Polk Failla revealed that the jury had submitted a note stating some members were firmly set […]
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After four days of deliberations, the New York jury deciding Tornado Cash Roman Storm’s fate said they can’t reach a unanimous verdict on all three charges.
An intriguing twist in the trial of Tornado Cash co-founder Roman Storm emerged after one juror reportedly requested time off to attend her mother’s birthday celebration. On Aug. 4, Inner City Press shared updates from the courtroom, revealing that the juror, identified as “Ms. Nelson,” had asked for a break from deliberations on Aug. 5. […]
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In their lengthy closing arguments on Wednesday, attorneys for both sides battled to win over the jury before releasing the group to decide the Tornado Cash developer’s fate.
After three days of witness testimony, Storm’s defense team rested their case on Tuesday.
In open court on Friday morning, prosecutors told the judge that they were weighing the possibility of criminally charging a general partner at Dragonfly Capital for his involvement with Tornado Cash, leading to him refusing to testify in Roman Storm's defense.
Over the last several trial days, the government laid out its case that Roman Storm could have changed the Tornado Cash protocol to make it less attractive to cyber criminals, but chose not to.
Opening arguments are set to begin shortly.
If convicted on all three charges, Storm faces a maximum sentence of 45 years in prison.
Tornado Cash co-founder Roman Storm took to Twitter with an urgent plea for support, ahead of his high-profile trial date tomorrow. Storm, who has been battling legal charges for nearly two years, is calling on the crypto community to help raise $500,000 in the next few days and $1.5 million in the coming weeks to […]
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Barring what she described as a “unicorn” piece of evidence that would force the discussion of the now-illegal sanctions, District Judge Katherine Polk Failla said no to sanctions talk at trial.
“The words ‘Van Loon’ are not going to show up in this trial,” District Katherine Polk Failla said during a Tuesday hearing in Manhattan.
The Eleventh Circuit Court of Appeals ruled on July 3 that Coin Center could dismiss its lawsuit against the Treasury Department.
The Tornado Cash developer is slated to go on trial later this summer.
Storm’s lawyers asked the court to order prosecutors to turn over any potentially helpful evidence in their case against the developer.
Storm's attorneys filed a letter Friday asking a judge to order prosecutors to review their records.
The Department of Justice said it had reviewed the memo by Todd Blanche with his office.
What is Tornado Cash? Tornado Cash is a decentralized, non-custodial crypto mixer designed to enhance transaction privacy on public blockchains. It uses smart contracts and zero-knowledge (ZK) proofs to conceal the onchain link between the sender and receiver of a transaction.Launched by Roman Storm and Roman Semenov on Ethereum in 2019, Tornado Cash allows users to send and receive cryptocurrency anonymously, without exposing their wallet history. Unlike centralized mixers, Tornado Cash operates entirely onchain through immutable smart contracts, meaning no central party controls the funds. When a user deposits crypto, such as Ether (ETH), Tornado Cash generates a cryptographic note, which the user can later use to withdraw the same amount to a different address. The protocol was launched to boost privacy in Ethereum-based transactions. Over time, the developers have expanded its functionality to support multiple Ethereum Virtual Machine (EVM)-compatible chains, including BNB Smart Chain (BSC), Optimism, Polygon, Arbitrum and Avalanche.Tornado Cash supports several ERC-20 tokens and native ETH across Ethereum and other EVM-compatible blockchains. At its peak usage, Tornado Cash supported several ERC-20 tokens, including:On Ethereum: Ether (ETH), Dai (DAI), USDC (USDC), Tether’s USDt (USDT), Wrapped Bitcoin (WBTC).On other EVM chains (via smart contract deployment): BNB (BNB), Polygon (POL), Avalanche (AVAX) and ETH on Arbitrum and Optimism.Did you know? Tornado Cash launched in 2019 as an experiment in financial privacy using just a few smart contracts. By 2022, it had processed billions in crypto transactions without ever holding user funds directly. How Tornado Cash works Unlike traditional financial systems that prioritize users’ privacy, blockchain public ledgers are accessible to everyone on blockchain explorers. Tornado Cash counters this by enabling anonymous transactions through smart contracts and zero-knowledge proofs, specifically zk-SNARKs.Crypto mixers typically pool and shuffle users’ funds, deduct a fee, and redistribute them. Tornado Cash, however, uses a pool-based system where deposits are commingled in a smart contract, and withdrawals to new addresses are delinked using zk-SNARKs, ensuring anonymity without random shuffling.Here’s how it works:At its core, Tornado Cash has smart contracts that break the onchain link between a sender and receiver. When a user deposits a cryptocurrency into a Tornado Cash pool, the smart contract issues a cryptographic note that the user can later use to withdraw the same amount to a different wallet address without revealing the link between the two.As Tornado Cash is a decentralized protocol, the underlying smart contracts cannot be changed or destroyed by anyone, including the Tornado Cash decentralized autonomous organization (DAO).The system uses ZK-proofs, which allow a user to prove that they have the right to withdraw a specific amount without revealing what deposit was theirs. This mechanism ensures that deposits and withdrawals are mathematically linked but anonymous.Tornado Cash is non-custodial, meaning it does not hold user funds at any point. The code runs independently and cannot be altered or controlled by the developers. The funds can remain in the pool for as long as the user likes.Before sanctions, Tornado Cash was primarily accessed via its web interface by connecting a crypto wallet. Advanced users could also interact with the protocol’s smart contracts directly using a command-line interface. How Tornado Cash got into trouble Tornado Cash landed in legal trouble primarily because it was allegedly used to launder billions of dollars in illicit funds, including crypto stolen in high-profile hacks. The Treasury Department’s Office of Foreign Assets Control (OFAC) sanctioned Tornado Cash on Aug. 8, 2022, under Executive Order 13694.There were several reasons behind Tornado Cash facing issues with regulators: Facilitation of money laundering: Tornado Cash was accused of facilitating money laundering, with the OFAC claiming it processed over $7 billion in virtual currency since 2019, approximately 30% of which was linked to illicit activity, per Chainalysis.Support for North Korean cybercrime: The platform was linked to laundering more than $455 million stolen by the Lazarus Group, a North Korean state-sponsored hacking group.Threat to national security: The OFAC accused Tornado Cash of materially assisting cyber-enabled activities originating outside the US, posing a significant threat to US national security, foreign policy and economic stability.Lack of effective controls: The Treasury highlighted Tornado Cash’s failure to implement adequate Anti-Money Laundering (AML) measures, allowing malicious actors to exploit it.Obfuscation of illicit transactions: According to the OFAC, Tornado Cash was facilitating anonymous transactions by obscuring their origin, destination and counterparties, enabling criminals to hide the proceeds of cybercrimes.Tornado Cash was designed to obfuscate the entire transaction history. This feature was beneficial for privacy, particularly in use cases like payroll, donations and personal spending, where anonymity can be important. However, the very feature that made it attractive for legitimate use also made it appealing to bad actors looking to launder money or conceal illicit transactions. This drew significant attention from regulators, who became concerned about the potential for criminal activities such as money laundering, terrorism financing or other forms of illicit finance.On March 21, 2025, the US Treasury lifted sanctions imposed by the Biden administration against Tornado Cash. Did you know? In August 2022, the US Treasury sanctioned Tornado Cash smart contracts, marking the first time code, not a person or organization, was blacklisted. This sparked a heated global debate over open-source freedom. Debate around Tornado Cash The action against Tornado Cash followed similar sanctions against Blender.io in May 2022, signaling a broader regulatory push to address cryptocurrency mixers. Such actions sparked a controversy in the crypto community. Critics of regulatory actions on the decentralized crypto mixers argue that sanctioning open-source code and punishing developers for creating privacy-preserving tools pose a threat to free speech and innovation. It undermines the neutrality of blockchain tools and sets a precedent where governments could censor software itself, not just its use.On the other hand, advocates of hardened regulatory sanctions say it is a necessary step to combat crypto-related crime and that illicit activity cannot be left unchecked. While the protocol does have legitimate uses, the scale of its illicit use, nearly 30% of funds tied to illicit actors, outweighed these benefits. They argue that the decentralized, non-custodial nature of the smart contracts in such protocols, which cannot be modified or controlled, complicates efforts to mitigate misuse. This leaves regulators with no option but to take action against the protocol itself to deter similar platforms from operating without safeguards.The Treasury held that the platform consistently failed to implement effective controls to prevent money laundering by malicious cyber actors. This lack of oversight allowed illicit actors to exploit the service without restriction, prompting the need for regulatory intervention to curb unchecked abuse.Nevertheless, the case has set up pressing questions about how to balance financial privacy with security and how decentralized, permissionless systems can coexist with traditional legal frameworks.Did you know? The Tornado Cash protocol is governed by a DAO, allowing tokenholders to vote on upgrades and proposals. Even after sanctions, the DAO continued to operate briefly on-chain. The efficacy of “sanctions” and their removal Despite sanctions, Tornado Cash remained operational through decentralized technologies like InterPlanetary File System (IPFS) and Tor. Its resilience led to doubts around the efficacy of sanctions on decentralized protocols and the broader implications for crypto regulation under evolving US policy.According to Chainalysis, Tornado Cash kept functioning on the dark web despite the sanctions. Its front end was available on the IPFS and via The Onion Router (known as Tor). IPFS is a peer-to-peer, distributed protocol for data storage and sharing, while Tor is open-source software enabling anonymous communication, often called the dark web.Per Flipside Crypto data, Tornado Cash saw $1.9 billion in deposits between Jan. 1 and June 30 in 2024, compared to $635.696 million in deposits during the same period in 2023.Unlike centralized services, Tornado Cash is decentralized and autonomous, making it difficult to shut down or control. But the US government targeted associated infrastructure, including GitHub repositories and websites. Developer Alexey Pertsev was arrested in the Netherlands on suspicion of concealing illicit financial flows and facilitating money laundering. Two of the co-founders, Roman Storm and Roman Semenov, were charged in 2023 for involvement in more than $1 billion in money laundering.A Dutch court later suspended Pertsev’s pretrial detention. A US court determined that Tornado Cash’s smart contracts aren’t “property,” though legal experts note this doesn’t clear the founders of other charges. High-profile figures like Vitalik Buterin and Edward Snowden have publicly supported Pertsev in the matter.The Treasury stated that a review of legal and policy issues regarding sanctions in “evolving technology and legal environments” led to the repeal of sanctions. In January 2025, a US court overturned the sanctions. The ruling came after Joseph Van Loon and other Tornado Cash users filed an appeal against the sanctions, arguing that the OFAC had overstepped its congressional authority by blacklisting the mixer in 2022.In April 2025, a federal judge in Texas ruled that the US Treasury Department’s sanctions against Tornado Cash were unlawful and barred the agency from reimposing them on the crypto mixer. Tornado Cash sanctions repeal: What’s next for crypto privacy? The repeal of sanctions on Tornado Cash marks a pivotal moment for decentralized finance (DeFi) and crypto privacy. It underscores the challenges of regulating permissionless, immutable systems while highlighting the growing legal recognition of code as distinct from traditional property or entities.For users, the lifting of sanctions restores access to a tool designed for financial privacy, potentially boosting adoption for legitimate use cases like shielding personal transactions or protecting sensitive donations.However, the repeal does not resolve the underlying tension between privacy and regulatory oversight. Tornado Cash’s continued operation, even during sanctions, demonstrates the resilience of decentralized protocols but also their vulnerability to misuse. Regulators worldwide are likely to scrutinize similar platforms, pushing for stronger AML and Know Your Customer (KYC) frameworks, even in DeFi. This could lead to hybrid solutions where privacy tools incorporate voluntary compliance mechanisms to deter illicit activity without compromising user autonomy.For Tornado Cash itself, the future remains uncertain. While the protocol’s smart contracts are immutable, its governance via the Tornado Cash DAO could evolve to address regulatory concerns, such as implementing optional transparency features for compliant users. The legal battles of its developers — Pertsev, Storm and Semenov — are ongoing, and their outcomes could shape public perception and trust in the platform. A guilty verdict could deter developers from building similar tools, while acquittals might embolden innovation in privacy-focused DeFi.The Tornado Cash saga has also sparked broader discussions about the right to financial privacy in the digital age. Advocates argue that privacy is a fundamental right, especially in an era of pervasive blockchain surveillance, where every transaction is traceable by default. Critics, however, emphasize the societal cost of unchecked anonymity, pointing to cases like the Lazarus Group’s exploits. Striking a balance will require collaboration between developers, regulators and the crypto community to ensure privacy tools serve legitimate users without becoming havens for crime.As the crypto landscape evolves, Tornado Cash will likely influence the next generation of privacy protocols. Emerging technologies, such as advanced ZK-proofs or layer-2 scaling solutions, could enable even more robust privacy guarantees while addressing regulatory concerns. For now, the repeal of sanctions offers a reprieve for Tornado Cash and its users, but it also sets the stage for a new chapter in the ongoing debate over privacy, security and the future of decentralized finance.
In December, a U.S. appeals court ruled that the U.S. Treasury’s Office of Foreign Asset Control (OFAC) exceeded its statutory authority in sanctioning Tornado Cash.
Decentralized exchange platform KiloEx revealed that it has recovered the entire $7.5 million stolen from it in a recent exploit. According to an April 18 statement: “We are pleased to announce that we have successful recovery of all stolen funds related to the recent security incident.” The exploit was first flagged by Cyvers, a blockchain […]
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Ethereum developers have begun kicking around a series of ideas that could make the Ethereum network private at its core.
Grewal warns that without a final court judgment, there's no assurance that Tornado Cash won't be re-sanctioned in the future.
TORN, the native token of privacy protocol Tornado Cash, has rallied over 70% following its removal from the US sanctions list. The Office of Foreign Assets Control (OFAC) confirmed on March 21 that it had delisted several Ethereum wallet addresses tied to the protocol. This marked a significant milestone for the embattled decentralized platform, which […]
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