DOJ advances Roman Storm case as FinCEN drops mixer proposal

On October 5, 2026, two arms of the US government sent very different signals about crypto privacy tools. The Department of Justice filed a new letter pushing back on Tornado Cash co-founder Roman Storm’s venue challenge.

That same day, FinCEN formally withdrew its proposal to treat international crypto mixing as a primary money laundering concern. One agency stepped back from the mixer fight. The other stayed firmly in it.

Where the Storm case stands

Storm is being prosecuted in the Southern District of New York. His legal saga began with his arrest in August 2023, and the October 5 filing landed 1,139 days after that arrest.

On August 6, 2025, a jury convicted Storm of operating an unlicensed money transmitting business. That charge carries a maximum sentence of five years.

The jury could not agree on the heavier counts. Those were conspiracy to commit money laundering and conspiracy to violate US sanctions, each of which could carry up to 20 years.

The retrial on the deadlocked conspiracy counts was originally set for October 26, 2026. It has since been pushed to April 26, 2027, with pretrial activity expected to begin in February 2027.

Storm’s defense has a motion of its own in play. His team filed a Rule 29 motion for acquittal on all counts on September 30, 2025.

Rule 29 lets a defendant ask the judge to throw out charges on the grounds that the evidence cannot support a conviction. The court heard oral arguments on April 9, 2026. As of October 2026, no ruling had been issued.

The new DOJ letter is aimed at Storm’s venue challenge, signaling the government intends to keep the case in SDNY and keep pressing forward.

FinCEN changes course on mixers

While prosecutors kept pushing, FinCEN reversed course. The agency withdrew its 2023 proposal that would have labeled international convertible virtual currency mixing a primary money laundering concern under the USA PATRIOT Act.

The reasoning centered on scope. Concerns were raised that the proposal defined mixing so broadly that it would discourage legitimate uses of privacy tools. There were also worries about the substantial reporting obligations the rule would have created.

The withdrawal also aligns with earlier suggestions in a White House report that discussed the privacy functions of mixers.

The government’s case against Tornado Cash

Prosecutors have not softened their view of what Tornado Cash enabled. They argue the protocol facilitated more than $1 billion in laundered funds tied to malicious activity.

Those allegations include funds linked to North Korea’s Lazarus Group. The hacking unit’s alleged involvement has been central to the sanctions-related count.

What this means for crypto privacy

Several dates are worth watching. The first is the Rule 29 ruling, which has been pending since the April 2026 arguments. The second is the court’s handling of the venue dispute, now that the DOJ has responded. The third is the February 2027 start of pretrial activity ahead of the April 26, 2027 retrial.