Federal prosecutors filed a supplemental authority on Monday citing a September 25 appeals court ruling that affirmed the convictions and sentence of Bitcoin Fog operator Roman Sterlingov. The D.C. Circuit held that venue in Washington, D.C., was proper for all four counts against Sterlingov, relying on evidence that an undercover agent conducted transactions from his D.C. office for money-laundering charges and that Bitcoin Fog served customers in the district for unlicensed money-transmission charges. Prosecutors argue this ruling directly supports their position in the case of Tornado Cash developer Roman Storm, asserting that activity in Manhattan established venue in the Southern District of New York for Storm’s conspiracy charges.
The prosecution points to testimony from Shakeeb Ahmed, who stated he used Tornado Cash from his Manhattan apartment. Judge Katherine Polk Failla heard arguments on Storm’s acquittal motion in April 2026 but has not yet ruled. A jury convicted Storm in August 2025 of conspiring to operate an unlicensed money-transmitting business but deadlocked on money-laundering and sanctions-conspiracy charges. Storm filed his post-trial motion for acquittal in September 2025, arguing prosecutors failed to prove intent to aid criminal misuse. If those deadlocked charges remain pending, a retrial is scheduled for April 26, 2027. Storm criticized the filing on X, noting the Treasury Department’s simultaneous announcement that it would withdraw its proposed crypto-mixer rule.
The invocation of the Bitcoin Fog precedent signals a strategic effort by federal prosecutors to solidify jurisdictional arguments in cryptocurrency enforcement cases. By leveraging the D.C. Circuit’s affirmation that venue can be established through specific transactional touchpoints, such as an undercover agent’s location or customer service within a district, the DOJ aims to counter defense claims that remote software development lacks sufficient nexus to traditional financial crimes. This legal maneuver underscores the government’s reliance on existing appellate rulings to define the scope of liability for decentralized infrastructure operators, potentially setting a broader standard for how venue is determined in digital asset prosecutions.
However, the juxtaposition of aggressive litigation with the Treasury Department’s withdrawal of its proposed crypto-mixer rule highlights a significant regulatory dissonance. While the DOJ pursues individual accountability through established legal frameworks, the executive branch appears to be recalibrating its approach to privacy tools, suggesting a potential shift away from broad regulatory prohibitions toward targeted enforcement. This divergence creates uncertainty for institutional participants and developers, who must navigate conflicting signals regarding the legality and operational risks of privacy-enhancing technologies. The outcome of Storm’s acquittal motion will likely serve as a critical indicator of whether courts will continue to support expansive interpretations of conspiracy and venue in the absence of clear statutory guidance.
