Federal prosecutors filed a letter with Judge Katherine Polk Failla in the Southern District of New York, citing the D.C. Circuit’s September 25 ruling that affirmed Bitcoin Fog founder Roman Sterlingov’s conviction and 150-month sentence. The filing argues that this precedent supports venue for Roman Storm’s trial in Manhattan regarding Tornado Cash charges. Prosecutors contend that testimony from user Shakeeb Ahmed, who accessed the service from his Manhattan apartment, establishes jurisdiction similar to how a sting operation established venue in the Bitcoin Fog case.
Storm’s motion for acquittal, which challenges venue on constitutional grounds, remains undecided following an April hearing where his lawyer argued Ahmed’s funds were held too briefly to further any conspiracy. A Manhattan jury convicted Storm in August 2025 of conspiring to operate an unlicensed money transmitting business but deadlocked on money laundering and sanctions counts. Storm contrasted the prosecution’s reliance on mixer activity with FinCEN’s withdrawal of a proposed reporting rule for crypto mixing, noting regulators cited concerns about chilling legitimate activity. His retrial on the deadlocked counts is scheduled for April 26, 2027.
The strategic use of the Bitcoin Fog appellate decision highlights the judiciary's evolving approach to establishing venue in decentralized finance cases. By drawing parallels between Sterlingov’s conviction and Storm’s alleged conduct, prosecutors are attempting to solidify legal precedents that allow federal authorities to prosecute software developers based on user interactions within specific jurisdictions. This move underscores the tension between technical decentralization and traditional legal frameworks, suggesting that courts may increasingly view access points and transaction timing as sufficient anchors for criminal liability, regardless of the underlying technology's distributed nature.
FinCEN’s simultaneous withdrawal of its proposed mixing reporting rule creates a complex regulatory landscape where enforcement priorities appear misaligned with policy adjustments. While regulators acknowledge the potential chilling effect of broad definitions on legitimate crypto activity, prosecutors continue to pursue aggressive interpretations of existing laws against privacy tools. This divergence signals ongoing uncertainty for institutional participants and developers, who must navigate conflicting signals from different branches of government. The outcome of Storm’s venue challenge will likely serve as a critical benchmark for future prosecutions involving non-custodial financial infrastructure.
