US federal prosecutors are pressing ahead with their case against Tornado Cash founder Roman Storm, but will drop a small part of their indictment after the Department of Justice rolled back its crypto enforcement last month.
Jay Clayton, the acting US Attorney for Manhattan, told federal court judge Katherine Polk Failla in a May 15 letter that the charges against Storm still stand, bar one part of a conspiracy to operate an unlicensed money transmitting business charge.
“After review of this case, this Office and the Office of the Deputy Attorney General have determined that this prosecution is consistent with the letter and spirit of the April 7, 2025 Memorandum from the Deputy Attorney General,” Clayton wrote.
Deputy Attorney General Todd Blanche’s April memo said the Justice Department would end the so-called “regulation by prosecution” of crypto, and added that the agency wouldn’t prosecute crypto mixers like Tornado Cash “for the acts of their end users or unwitting violations of regulations.”
Clayton added that the indictment against Storm will cut the accusation that he failed to comply with money transmitting business registration requirements.
Prosecutors were pursuing that charge as part of their allegation that Storm conspired to run Tornado Cash as an unlicensed money transmitter.
The government will still push ahead with the charge under the accusation that Storm transmitted funds while knowing they were derived from a criminal offence or were intended to support unlawful activity.
The Justice Department alleged that Tornado Cash helped launder over $1 billion worth of crypto, including for the sanctioned North Korean state-backed hacking collective the Lazarus Group.
Clayton said the Justice Department will also still pursue the other two charges in its indictment, one count of money laundering conspiracy and one count of conspiracy to violate US sanctions.
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The money laundering and sanctions violations conspiracy charges each carry a maximum sentence of 20 years in prison, while the unlicensed money transmitter conspiracy charge carries a maximum sentence of five years.
Storm has pleaded not guilty, and his trial is scheduled for July 14. He was charged alongside fellow founder Roman Semenov, who is at large and believed to be in his native Russia.
Blanche memo cited in bids to toss
Other crypto executives facing charges have pointed to Blanche’s memo in a bid to have their cases dismissed.
Crypto mixer Samourai Wallet co-founders Keonne Rodriguez and William Hill had pointed to the memo to try to dismiss their charges of conspiracy to operate an unlicensed money transmitter and money laundering conspiracy.
Braden John Karony, the CEO of crypto firm SafeMoon, has also cited the memo in an attempt to have the charges of securities fraud, wire fraud and money laundering conspiracy against him dismissed.
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