Opinion: Tornado Cash developer conviction raises alarm for open-source devs

Key Points

1. Roman Storm was found guilty under 18 U.S.C. § 1960(b)(1)(C), which treats non-custodial software like Tornado Cash as money transmission, despite FinCEN's 2019 guidance exempting such providers.

2. Legal experts argue the verdict sets a dangerous precedent, criminalizing code publication regardless of intent or control, and reflects an elastic interpretation of jurisdiction by SDNY prosecutors.

3. The DOJ's approach is criticized as hypocritical, contrasting with lenient treatment of major financial institutions in scandals like 1MDB, where Goldman Sachs avoided criminal convictions.

4. The Blockchain Regulatory Certainty Act (BRCA) could clarify that non-custodial developers are not money transmitters, but it offers no retroactive relief for Storm.

5. SEC Commissioner Hester Peirce emphasized financial privacy as a fundamental right, opposing SDNY's criminalization of neutral tools like Tornado Cash.