Tornado Cash developer Roman Storm appeared before a federal judge in a courtroom on Thursday, after seeking permission to appeal a previous conviction. The case was not settled at the hearing, and the court indicated that some critical issues of law were still pending.
Judge Katherine Polk Failla listened to the arguments of the lawyers of Storm and the U.S. Department of Justice in a Manhattan courtroom.
She did not issue a ruling at the end of the session and told both sides the matter required careful review.
“This is a lot,” she stated before adjourning.
Court reviews Storm’s motion and prior verdict
The hearing took place in the U.S. District Court for the Southern District of New York. Storm petitioned the court to vacate his money transmitting conviction. That ruling was in August, when a jury convicted him of that count but could not decide on two others related to money laundering and sanctions.
Judge Failla asked questions to both of them over a period of over three hours. She clarified that her questions were not to be interpreted as an indication of her ultimate opinion. She explained that the court would not have listened to the hearing, had a decision already been reached.
At the close of the session, she said she would take time to review the arguments. The lack of a ruling leaves the case in place for now. Prosecutors have already asked for a retrial later this year on the unresolved counts.
Dispute centers on Tornado Cash development
The government argued that Storm did more than write code. Prosecutors said he continued to update Tornado Cash even after it became clear that bad actors used the service to move funds. They also mentioned that those updates made the platform more effective for laundering activity.
The judge tested that claim with a comparison to widely used software. She asked whether updates to a system, such as an operating system, could also benefit both lawful and unlawful users. The exchange focused on how the law should treat tools that have mixed use.
Storm’s legal team said building a crypto mixing service is not illegal. They argued that Tornado Cash serves privacy needs and that Storm did not design it for criminal activity. They also said that developers should be allowed to maintain and improve software that has lawful uses.
The defense maintained that upgrades should not become grounds for criminal liability when the underlying technology remains legal. That point formed a central part of Storm’s request to overturn the conviction.
Debate over responsibility and inaction
Another issue in court was whether Storm had a duty to act once he knew criminals were using the platform. Prosecutors said he could have blocked transactions or shut down the service. The defense challenged that position and asked whether failure to act can count as participation in a crime.
The judge also examined what qualifies as an “overt act” in a conspiracy case. She asked whether inaction could meet that standard. The discussion extended to jurisdiction, including whether the use of New York-based infrastructure was enough to place the case in the Southern District.
Tension rose when a government lawyer suggested that funds mixed with illicit proceeds could also face liability. The comment drew an audible reaction from the courtroom. Some attendees later said the claim assumed that users of privacy tools lack legitimate reasons, which they disputed.
During the hearing, the court demanded that both parties provide answers which are concise and straight to the point on the application of the law to decentralized software. The discussions revealed that both technical and legal issues are raised in the case that are yet to be resolved.
Broader attention from industry and policymakers
Storm’s case has drawn attention from crypto advocates and policy groups since the August verdict. Supporters have called for an appeal and pointed to ongoing debate over how the law treats software developers. The issue has gained traction as lawmakers consider new rules for digital assets.
Recent discussions in Washington include proposals that aim to clarify that non-custodial developers are not money transmitters. These efforts could shape how similar cases are handled in the future. Storm’s case has become a reference point in that debate.
Amanda Tuminelli, chief legal officer at the DeFi Education Fund, attended the hearing and later commented on the proceedings.
“The lack of nuance, the misrepresentations about how a UI functions, and the equivocation between different technologies is really disheartening at this point in the case,” Tuminelli stated. “It was good to see the judge digging in and asking detailed questions, but there is no way to predict how she will rule on Storm’s motion.”
She noted that the judge discussed possible dates for a retrial, which suggests the case may continue.
Storm later echoed that view in his own response after the hearing. In a post on X, he said he shared the same concerns and asked for continued support from the crypto community as the case moves forward.