The post Tornado Cash Verdict Threatens to Hold Back DeFi Where it Matters Most appeared on BitcoinEthereumNews.com.

Tornado Cash co-founder conviction will weigh on privacy solutions for public blockchains. This week’s verdict against Tornado Cash co-founder Roman Storm signals that crypto developers may face increased legal risks when working on one of the areas the industry arguably needs most: privacy. Roman Storm, the co-founder of crypto privacy tool Tornado Cash, was found guilty on Wednesday of one criminal charge in a case that could reshape how the law treats developers in decentralized finance (DeFi). The trial centered on allegations that Storm knowingly enabled money laundering through Tornado Cash, despite publicly promoting it as a privacy tool. The New York jury ultimately convicted him of conspiracy to operate an unlicensed money-transmitting business and was unable to reach a verdict on two other charges: violating U.S. sanctions and engaging in money laundering. “If contributing to open-source code, especially something that protects privacy, becomes a crime, that’s a slippery slope,” said Shady El Damaty, the co-founder and CEO of human.tech by Holonym. “What we should be encouraging is responsible innovation, systems that preserve privacy and decentralization but still support transparency and accountability.” The outcome could force privacy-focused crypto projects to add more rules, like checking users’ identities and tracking transactions. These changes could ultimately discourage developers from building new tools, changes that run counter to DeFi’s core idea of creating open, permissionless systems. “Roman Storm built a privacy tool, not a criminal empire. The real issue is that privacy itself is being framed as a threat, and that’s chilling for anyone who’s ever worked on decentralized systems,” said Kadan Stadelmann, CTO of Komodo Platform. “If this verdict stands, we’re basically telling devs to stop innovating or lawyer up.” Public blockchains keep a public record of transactions, which means that users’ financial history is accessible and visible. That’s a problem for…

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Filed under: News - @ August 7, 2025 10:21 pm