Prosecutors push for second trial on money laundering charges
Federal prosecutors have asked a Manhattan judge to schedule a retrial for Tornado Cash developer Roman Storm this October. They want to try him again on money-laundering and sanctions-evasion charges that a jury couldn’t agree on last August. The request came in a letter filed Monday to Judge Katherine Polk Failla.
Prosecutors under U.S. Attorney Jay Clayton suggested October 5 or 12 for the retrial. Those dates apparently work with the defense team’s schedule. The government plans to retry Storm on two specific counts from the indictment. Together, those charges could mean up to 40 years in prison if he’s convicted.
The first trial’s mixed outcome
Last August, a Manhattan jury did find Storm guilty of one thing—conspiring to operate an unlicensed money-transmitting business. But they deadlocked on the two more serious conspiracy charges. The jury deliberated for four days before hitting that impasse. The judge even gave them an Allen charge, urging them to keep trying to reach a verdict.
After the retrial request became public, Storm wrote on X about his situation. “If I can’t fund a defense, they win by default,” he said. He connected his case to broader issues about financial privacy and free speech for coders.
Conflicting policy signals from Washington
The retrial request comes at a strange time, policy-wise. On the same Monday, the U.S. Treasury sent a report to Congress that acknowledged something interesting. It said lawful users of digital assets might use mixers for financial privacy on public blockchains. That’s basically what Tornado Cash does—it’s a mixer.
But at the same time, regulators keep warning that these tools can hide illicit funds. David Sehyeon Baek, a cybercrime consultant, told Decrypt this shows how confused U.S. crypto policy is right now. “On one side, you have Treasury finally acknowledging out loud that mixers and privacy tools can be perfectly lawful,” he said. “On the other side, you have the DOJ pressing ahead with a very aggressive criminal theory against a mixer developer.”
Baek thinks the timing matters. He warned this case looks like an attempt to set a precedent. If the DOJ succeeds, it could make open-source developers responsible for what strangers do with their code. That would matter more than any friendly language in policy reports, he suggested.
The broader context and pending motions
There’s some political context here too. In December, Trump told Decrypt he’d consider a pardon for Samourai Wallet developer Keonne Rodriguez. Rodriguez got five years for building a Bitcoin privacy tool with architecture similar to Tornado Cash. He’s currently serving time and wrote in January that prison “often feels like a bad dream I cannot wake from.”
The U.S. Treasury originally blacklisted Tornado Cash in August 2022. They alleged $7 billion had been laundered through it since 2019, including by North Korea’s Lazarus Group. But an appellate court later questioned the agency’s authority to sanction open-source smart contracts. The sanctions were ruled unlawful and lifted.
Before any retrial happens, the court needs to rule on Storm’s pending Rule 29 motion. That’s a request for acquittal on legal grounds. It’s scheduled for argument on April 9. Storm’s defense says it’s “premature” to set a trial date before that motion gets resolved.
Miller Whitehouse-Levine, CEO of the Solana Policy Institute, called the retrial move “depressing” in a Monday post on X. His organization pledged $500,000 last year to fund Storm’s legal defense. He said this makes passing the Blockchain Regulatory Certainty Act “all the more critical.”
That bipartisan bill, reintroduced in January, would explicitly protect non-custodial developers. It would stop them from being classified as money transmitters under federal law, as long as they can’t move user funds themselves. The whole situation feels messy, with different parts of the government sending mixed messages about where they stand on crypto privacy tools.
