Morning Minute: Tornado Cash Developer Found Guilty (Partially)

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Today's top news:

Crypto majors soar on 401(k) and BOE rate cut news; ETH & SOL lead

Trump to sign Executive Order today allowing crypto in 401(k)s

Tom Lee calls for $16,000 ETH + 5-10% crypto portfolio allocation

Roman Storm found guilty on 1 count in split jury, retrial likely to come

Art Blocks introduced ‘Art Blocks 500’ closing its first chapter

⚖️ Tornado Cash Developer Found Guilty (Partially)

The first U.S. criminal trial over crypto privacy tools ends in a split decision.

Leaving reasons to be optimistic about the future.

📌 What Happened

Roman Storm, the co-founder of crypto mixing protocol Tornado Cash, was found guilty on one count on Wednesday in a split jury decision.

That guilty charge was for operating an unlicensed money-transmitting business, but the jury was deadlocked on the more serious charges of money laundering and sanctions violations.

Storm was accused by the DOJ of enabling North Korea’s Lazarus Group to launder over $1B through Tornado Cash. Prosecutors claimed he knew the risks and “looked the other way.”

But the jury didn’t buy that narrative, refusing to convict on the headline charges.

He now faces sentencing for the one guilty count.

Notably, Judge Failla denied the motion to remand him to jail, declaring:

“There is a lot of fighting left in this case before sentencing, and I think Mr. Storm will stay to fight it.”

🗣️ What They’re Saying

“Roman Storm was never a criminal. He built software that was meant to protect financial privacy.” - Brian Klein, Storm’s attorney

“It’s a big win. The ‘1960’ charge is bullshit and we’re going to fight it all the way. You know how President Trump said ‘fight, fight, fight’? We’ll do that too.” - Roman Storm

“Roman Storm was convicted for conspiracy to operate an unlicensed money transmitting business under Section 1960. The jury was deadlocked on money laundering and sanctions. DOJ will decide in the coming days if it wants to retry those charges in a new trial. A sad day for DeFi.”

- Jake Chervinsky, crypto legal expert

🧠 Why It Matters

This is the first time a U.S. court has criminally convicted a crypto developer simply for writing code that enables privacy.

It sets a precedent, though a limited one.

The jury’s refusal to convict on sanctions and laundering shows the legal system isn’t fully on board with the idea that developers are responsible for how others use their tools.

Still, this guilty verdict sends a signal to open-source devs working on financial privacy that although the US is embracing crypto, there will be lines drawn in the sand.

But there is hope for those who believe Roman Storm should not be found guilty.

There will be a retrial and likely appeals after that, and pending how much progress has been made in the US on Project Crypto (especially with respect to dev rights), the environment may be very different.

Don’t count Roman out just yet…

🌎 Macro Crypto and Memes

A few Crypto and Web3 headlines that caught my eye:

Crypto majors are very green on the Trump 401(k) news; BTC +2% at $116,600, ETH +5% at $3,820, XRP +4% at $3.07, SOL +5% at $173

PENGU (+12%), ENA (+11%) and PENDLE (+10%) led top movers

Both BTC and ETH ETFs saw net inflows on Wednesday for first time in 5 sessions; $91.6M for BTC, $35M for ETH

Trump is going to sign an executive order allowing crypto and other assets into 401(k)s today according to Bloomberg

Ethereum transactions surged this week, with daily transactions hitting ~1.87M, nearing January 2024’s all-time high

MetaMask plans to launch a stablecoin called “mmUSD” in partnership with Stripe, according to a now-deleted post

Tornado Cash developer Roman Storm was found guilty on Wednesday, convicted on one count of operating an unlicensed money-transmitting business

The State of Michigan pension increased its Bitcoin ETF stake (ARK) to 300,000 shares (~$11.3M)

An Ex‑Apple engineer introduced the Payy card, a privacy-focused card which uses zero‑knowledge proofs and a private blockchain to conceal stablecoin transactions from public blockchains

In Corporate Treasuries

BMNR’s Tom Lee went on CNBC and gave a $16,000 ETH target, now recommends 5-10% portfolio allocation to crypto for median investors and 20% for younger folks

Bakkt is planning to buy a 30% stake in Japanese Marusho Hotta and launch a BTC TreasuryCo

Cosmos Health signed a securities agreement to launch a $300M ETH TreasuryCo

In Memes

Memecoin leaders are very green on the day; DOGE +6%, Shiba +4%, PEPE +5%, BONK +6%, PENGU +12%, TRUMP +3%, SPX +7%, and FARTCOIN +4%

The TROLL meme creator said he has no desire to pursue legal action against the memecoin which soared to $200M yesterday (TROLL -6% to $170M)

BOSS was the runner of the day, soaring 1,400% to $20M; LIZARD +100% to $10M and SWIF +300% to $3..7M were other notable movers

REKT hit a new ATH at $560M market cap, now with a 6-day green streak

💰 Token, Airdrop & Protocol Tracker

Here's a rundown of major token, protocol and airdrop news from the day:

Ventuals launched its testnet for tokenized private market stocks on Hyperliquid

Magic Eden airdropped 10M ME tokens yesterday for its Season 2 rewards

Pendle launched Boros, tokenizing perp funding‑rate swaps (initially for ETH/BTC on Binance), enabling hedging and fixed‑vs‑floating rate trades

WeatherXM launched in the Solana dApp store, allowing users to see hyperlocal forecasts while those that run the weather stations earn & claim tokens for powering those forecasts

BOB raised another $9.5M to build its Bitcoin DeFi product

Magic Eden airdropped 10M $ME tokens yesterday for its Season 2 Rewards

🤖 AI x Crypto

Section dedicated to headlines in the AI sector of crypto:

Overall market cap up 5% to $10.9B, leaders were very green

FARTCOIN (+5%), VIRTUAL (+10%), TIBBIR (+10%), ai16z (+7%) & ALCH (+1%)

BIOS (+200%), HEU (+60%) and AXR (+46%) led top movers

Trump Media’s Truth Social is now beta-testing “Truth Search AI,” an AI-powered search engine built with Perplexity

Pudgy Penguins announced a collab with Ava Studio to enable holders to make AI content more easily

🚚 What is happening in NFTs?

Here is the list of other notable headlines from the day in NFTs:

ETH NFT leaders were mostly green; Punks +1% at 52.2 ETH, Pudgy +2% at 14.2, BAYC -1% at 11.85 ETH

Meebits (+17%) and Memeland Captainz (+15%) led notable top movers

Bitcoin NFTs were mostly red or even; Quantum Cats +4%

Abstract NFTs were mostly red; Bearyz +12% led

Art Blocks introduced 'Art Blocks 500' as the complete collection of the first 500 projects published on their platform, meaning 5 more projects will be minted (2 Curated, 3 Explorations) to complete the collection (future plans TBD)

Art Blocks is "putting a glass case" around its first 500 projects

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