Torrent Network's Stock Experiences 15% Plunge Following Conviction Decision - What Happens Next?
In a landmark case, Roman Storm, co-founder of the privacy-focused cryptocurrency mixer Tornado Cash, was found guilty by a federal jury in Manhattan on August 6 of conspiracy to operate an unlicensed money transmitting business. However, the jury deadlocked on more serious charges of conspiracy to commit money laundering and conspiracy to violate sanctions, resulting in a partial mistrial on those counts.
The verdict comes amidst a surge in activity on the Tornado Cash network. On August 6, the number of active addresses rose sharply to 173, marking the highest level in the past month. This increase in activity may be linked to users moving funds in response to the legal outcome.
The trial has shed light on the challenges in applying traditional anti-money laundering and sanctions laws to decentralized finance (DeFi) tools like Tornado Cash. Storm's defense has argued that he only published open-source code without control over its use, invoking First Amendment protections. The case is significant as it sets important precedents for how DeFi developers are held accountable under U.S. law.
Following the verdict, the price of Tornado Cash's native token, TORN, dropped about 15%. At press time, TORN was trading at $10.3, with a 24-hour trading volume of roughly $1.7 million. Analyst Papa Wheelie suggested that the token could dip if there was a guilty verdict. However, he also noted that while downside was likely in the short term, he expected the protocol itself to stay active and could recover in time.
Technical analysis indicates active selling with no imminent indications of reversal. The TORN/USDT pair shows strong selling, as indicated by the Relative Strength Index (RSI) dropping to 32, approaching oversold conditions. The RSI has moved below its signal line, which was at 45. Furthermore, the MACD indicator is also negative, with its line under the signal line and red bars in the histogram still increasing.
The retrial for the deadlocked felony charges has been delayed until December 2025 following a federal court-approved extension to allow for post-trial motions and preparation. Storm now faces a sentence that could reach up to five years in prison. Despite prosecutors' requests to detain him due to alleged immigration concerns and connections to Russia, Judge Katherine Failla allowed Storm to remain free on $2 million bail pending sentencing, finding he is not a flight risk and noting his strong ties to the U.S.
The jury did not reach agreement on two other charges tied to money laundering and sanctions violations. These proceedings will likely continue to shape the regulatory landscape for DeFi and privacy-focused cryptocurrency projects.
- In light of the verdict against Roman Storm, the accused co-founder of Tornado Cash, the trading volume of TORN, the platform's native token, has significantly increased, with analyst Papa Wheelie forecasting potential dips due to the legal outcome but anticipating a recovery in the long term.
- The blockchain industry, particularly the decentralized finance (DeFi) sector, continues to face challenges in applying traditional anti-money laundering and sanctions laws, as highlighted by the ongoing case of Tornado Cash's Storm, who argues that his open-source code publishing does not constitute control over its use.
- As the industry awaits the retrial for the deadlocked felony charges against Storm, slated for December 2025, the regulatory landscape for DeFi and privacy-focused cryptocurrency projects is expected to continue evolving, shaping future industry practices and responses to such legal proceedings.
