TL;DR:
- Roman Storm was convicted on August 6, 2025, for operating an unlicensed money transmission business as co-founder of Tornado Cash.
- Section 604 of the CLARITY Act would create a federal safe harbor for non-custodial developers like Storm, exempting them from classification as money transmitters.
- The bill passed the House 294-134 in July 2025 and the Senate Banking Committee 15-9 in May 2026, but still has no floor vote scheduled.
The conviction of Roman Storm, co-founder of the privacy protocol Tornado Cash, became the central argument of Senator Cynthia Lummis to push forward Section 604 of the Digital Asset Market Clarity Act. Storm was found guilty of conspiring to operate an unlicensed money transmission business, an offense carrying a maximum sentence of five years. The jury did not reach a verdict on the other two more serious charges: conspiracy to launder money and conspiracy to violate sanctions.
The senator was direct about the motivation behind the legislative proposal: “Software developers should not need an army of lawyers to know whether their code is legal.” More than 60 CEOs and founders from the sector, including executives from Coinbase, Uniswap, Kraken, a16z, and Paradigm, signed a letter in June demanding that Section 604 be a non-negotiable condition for supporting the bill.
Software developers should not need an army of lawyers to know if their code is legal. The Clarity Act ends that absurdity.
— Senator Cynthia Lummis (@SenLummis) June 21, 2026
A Legal Architecture to Protect Developers like Storm
Section 604 derives from the Blockchain Regulatory Certainty Act, originally introduced in 2018. Its text establishes that a non-controlling developer will not be treated as a money transmission business under sections 5330 and 1960 of the federal code, simply for publishing distributed ledger software, providing self-custody tools, or operating infrastructure nodes.
The determining criterion is the “no-control” test: the developer qualifies only if they lack the legal right to control user transactions, the unilateral capacity to initiate them, and the ability to execute transfers without approval from another party. Non-custodial protocols, by design, meet all three conditions. Tornado Cash fits precisely within that architecture.
This provision also operates alongside Section 601, which limits registration obligations with the SEC for non-custodial developers, and Section 207, which establishes an exemption under commodities legislation. The three sections together redefine the open-source developer as a technical publisher, not a financial intermediary.
What Section 604 Does Not Cover
However, the scope of the protection has precise limits. Storm’s conviction rested on the theory that he actively participated in the protocol’s operation, not merely in its creation. If the prosecution can sustain that a developer exercised operational control over the system, the protection of Section 604 does not apply.
The bill still has no scheduled floor vote in the full Senate, with active friction between committees that for now keeps the outcome in doubt. Storm will keep waiting.
