The US Treasury Department has withdrawn its appeal in the sanctions case against Ethereum-based privacy tool Tornado Cash. This development is considered a significant turning point for the future of the platform, while Tornado Cash’s local asset TORN also gained around 5 percent in value following the news. However, the platform’s future is still full of uncertainties: Tornado Cash co-founder Roman Storm’s criminal case is ongoing.
Sanctions withdrawn, case dropped
Tornado Cash has been facing legal pressure for a long time. In 2022, the US Treasury Department’s Office of Foreign Assets Control (OFAC) blacklisted the protocol and linked it to North Korea-related cyberattacks. However, OFAC withdrew this decision in March 2025. Subsequently, the government and blockchain advocacy group Coin Center mutually applied to have the case dropped. This application was approved by the appeals court, and the case was officially closed.
The main purpose of Coin Center was to prevent the government from imposing sanctions on decentralized software like Tornado Cash on similar grounds in the future. In this regard, the US courts have ruled in favor of Coin Center, limiting the state’s sanctions authority. According to Bloomberg Law, this decision not only lifts existing sanctions, but also prevents Tornado Cash from being targeted again on similar grounds.
Roman Storm’s trial continues
The criminal case against Roman Storm, one of Tornado Cash’s software developers, is still ongoing. The US Department of Justice accuses Storm of money laundering over $1 billion and collaborating with the North Korea-linked Lazarus Group. The trial in the case is set to begin in New York on July 14.
Storm’s defense argues that Tornado Cash’s smart contracts operate outside of central control, meaning that developers have no direct influence over transactions. However, a similar argument was ruled invalid in the case of Alexey Pertsev, another Tornado Cash developer in the Netherlands, who was sentenced to 64 months in prison. US courts, on the other hand, are more open to evaluating software development within the scope of freedom of expression.
Storm’s case will set a precedent for determining the legal liability of developers in decentralized finance protocols. If convicted on all charges, he could face up to 45 years in prison. The Ethereum Foundation provided $500,000 in defense costs for Storm.
The US is shifting its crypto sanctions
With the lifting of sanctions on Tornado Cash, the US Treasury and Justice Departments have also taken a new direction in crypto policies. The mere development of software is no longer considered sufficient to warrant sanctions or charges. The government says it will focus on direct criminal intent and actions.
