On April 7, the U.S. Department of Justice filed a response in the Southern District of New York rejecting Tornado Cash co-founder Roman Storm's attempt to use a recent Supreme Court ruling to dismiss his criminal case. The filing comes five days before a scheduled hearing on Storm's separate motion for acquittal, and weeks after prosecutors proposed an October 2026 retrial on the two charges a jury could not agree on last summer.
Storm Cited a Copyright Case. Prosecutors Said It Was Irrelevant.
Storm's defense team filed a brief on April 2 invoking Cox Communications v. Sony Music, a Supreme Court ruling from March 25, 2026 that addressed whether an internet service provider could be held liable for the copyright infringement of its users. The court found that Cox's awareness of customer misconduct did not, by itself, establish intent to infringe.
Storm's lawyers argued the same principle applied here: building a privacy tool that some people misuse should not make the developer criminally liable, particularly when the tool has legitimate uses. They pointed out that the Trump administration itself had backed Cox's position that an internet company should not be held responsible for the illegal actions of some of its users.
Prosecutors disagreed on every count. The DOJ's April 7 filing drew a sharp line between the two cases: Cox involved civil copyright liability, while Storm faces criminal charges for money laundering conspiracy, sanctions evasion, and operating an unlicensed money transmitting business. The government wrote that Cox "went out of its way to discourage users from engaging in copyright infringement with policies that ended the vast majority of identified misconduct," while Storm "was personally aware of the misconduct of some Tornado Cash users and did not intervene to stop it."
The First Trial Ended in a Split Verdict
In August 2025, a jury in Manhattan convicted Storm on one count: conspiracy to operate an unlicensed money transmitting business. But jurors deadlocked on the two heavier charges, conspiracy to violate sanctions under the International Emergency Economic Powers Act (IEEPA) and conspiracy to commit money laundering, after several days of deliberation.
The prosecution's case leaned on Tornado Cash's documented role in processing over $1 billion in illicit funds, including roughly $600 million that North Korea's Lazarus Group laundered from the 2022 Axie Infinity hack. Prosecutors described Storm not as a passive coder but as a core contributor who maintained, promoted, and upgraded the protocol while knowing criminals were using it.
Storm's defense countered that Tornado Cash was a privacy tool comparable to VPNs or encrypted messaging apps. His team argued the protocol was sufficiently decentralized that Storm lacked meaningful control over how it was used.
The jury's split suggests neither argument fully landed.
The DOJ Wants a Second Chance on Two Counts
In March, prosecutors asked Judge Katherine Polk Failla to schedule a retrial for early October 2026, proposing October 5 or 12. The two counts being retried, sanctions conspiracy and money laundering, carry a combined maximum sentence of up to 40 years.
Before any retrial begins, however, the court must rule on Storm's Rule 29 motion for acquittal. That hearing is set for April 9. If Judge Failla grants the motion on either count, those charges would be dismissed outright without a second trial.
Why the Case Still Matters After OFAC Delisted Tornado Cash
The Treasury Department's Office of Foreign Assets Control (OFAC) removed Tornado Cash from its sanctions list in April 2025, following a Fifth Circuit ruling that the protocol's immutable smart contracts did not qualify as "property" of a foreign national. That decision was widely celebrated in the crypto privacy community.
But the OFAC delisting did not make Storm's criminal case disappear. His charges are based on his personal conduct, not on the protocol's sanctions status. The DOJ's continued pursuit of the case under the current administration, even after Todd Blanche's appointment as interim attorney general and a broader memo signaling a lighter touch on crypto enforcement, signals that developer liability in DeFi remains a live legal question regardless of which party controls the White House.
The outcome will shape how protocol teams think about compliance. If Storm is convicted at retrial, the precedent could push DeFi builders toward KYC layers, geofencing, or formal legal opinions before deploying smart contracts that touch user funds. If acquitted, the "neutral tool" defense gains its strongest footing yet in federal criminal court.
Overview
Federal prosecutors on April 7 rejected Roman Storm's attempt to cite a Supreme Court copyright ruling in his defense, calling it irrelevant to criminal charges. Storm faces retrial on money laundering and sanctions conspiracy counts after a jury deadlocked on those charges in August 2025. The DOJ has proposed an October 2026 retrial date, but a hearing on Storm's acquittal motion on April 9 could narrow or end the case first. The prosecution centers on Tornado Cash's role in processing over $1 billion in illicit funds, including $600 million linked to North Korea's Lazarus Group.
