I joined Fortune in August 2022, the same month that the U.S. Treasury Department sanctioned Tornado Cash, a virtual currency mixer that allowed users to input their (very traceable) cryptocurrency holdings and receive an anonymous output. The software, predictably, became a favorite of terrorist organizations and North Korean-affiliated hacking groups, but it also embodied the cypherpunk ideology that birthed the crypto sector.

OFAC’s action created novel questions, such as whether a piece of code, rather than a person or organization, can be sanctioned. It also drew the ire of privacy advocates, who argued that internet users should have the right to own and send digital cash without government interference, just as offline people can with physical cash (to a degree). These, more than crypto bros trying to drive up the price of their tokens through sex toy-related stunts, are the fascinating dilemmas raised by blockchain technology, and what sets it apart from other forms of financial technology. (And as much as I hoped topics like Tornado Cash would dominate my coverage, Sam Bankman-Fried’s FTX empire collapsed two months later.) 

A year after the sanctions, the Department of Justice brought charges against the creators of Tornado Cash, with one, Roman Storm, arrested in the United States. This was a tricky case for the crypto industry to get behind. The DOJ’s indictment made clear that the founders knew their software’s main utility was to help money launderers, including North Korea’s Lazarus Group, and they were earning millions of dollars off the platform through their own proprietary token. In a recurring segment I like to call “Are you taking notes on a criminal f***ing conspiracy,” one founder admitted over text that they had to relinquish control over the software to make it seem like they weren’t the owners. As one former DOJ prosecutor told me at the time, “These are pretty egregious facts.” 

But many powerful voices in the crypto industry, including the venture giant Paradigm, still threw their weight behind Storm, arguing that the government’s case eroded the idea of privacy-preserving software and was in direct contradiction to previous guidance issued by the financial crimes division of the Treasury Department. 

Storm’s initial trial, which was held in the same courthouse that hosted Bankman-Fried, wrapped up last week. Though he avoided two of the more serious charges, the jury still found him guilty on one, related to operating an unlicensed money transmitting business. His advocates are vowing to fight it, arguing that the decision sets a dangerous precedent for the future of privacy software. 

The more interesting question is why the case was allowed to continue under the Trump administration, which has broadly embraced the crypto sector—or at least the elements more tied to financial gains. The Securities and Exchange Commission abandoned cases against Coinbase and Justin Sun, and the DOJ issued a memo announcing the end of “regulation by prosecution” against the blockchain industry. They even dropped one of the lesser charges against Storm about registration. But the core charge—that a developer should be responsible for non-custodial software—was allowed to continue. 

The refrain since Trump returned to office has been that, thanks to the lax new regulatory approach, crypto enforcement is off the table. Unfortunately for Storm, it seems that’s restricted to memecoins.   

Leo Schwartz
X: @leomschwartz
Email: leo.schwartz@fortune.com

Submit a deal for the Term Sheet newsletter here.

Joey Abrams curated the deals section of today’s newsletter. Subscribe here.

VENTURE DEALS

- BinSentry, a Kitchener, Ontario-based AI-powered agriculture technology company, raised $50 million in Series C funding. Lead Edge Capital led the round. 

- Casap, a San Francisco-based developer of automation technology for dispute and fraud cases, raised $25 million in Series A funding. Emergence Capital led the round and was joined by Lightspeed Venture Partners, Primary Venture Partners, SoFi, and others

PRIVATE EQUITY

- Datasite, backed by CapVest Partners, acquired Sourcescrub, a San Francisco-based provider of deal-sourcing data and workflows. Financial terms were not disclosed.

- HG Insights, backed by Riverwood Capital Investors, acquired Madkudu, a Mountain View, Calif.-based provider of GTM Solutions. Financial terms were not disclosed. 

- Jenmar, a portfolio company of FalconPoint Partners, acquired Weber Mining & Tunnelling SAS, a Rouhling, France-based developer of resins and foams for mining processes. Financial terms were not disclosed.

- Schneider Geospatial, a portfolio company of Align Capital Partners, acquired Full Circle Technologies, a Boston, Mass.-based permitting & licensing software company. Financial terms were not disclosed.

EXITS

- SentinelOne agreed to acquire Prompt Security, a New York City-based AI-powered cybersecurity platform, from Jump Capital.

OTHER

- 10x Genomics agreed to acquire Scale Biosciences, a San Diego, Calif.-based single-cell analysis company. Financial terms were not disclosed.