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Federal prosecutors are citing a fresh appeals court win in the Bitcoin Fog case to argue that Roman Storm’s Tornado Cash charges belong in New York. In a filing on Monday, the DOJ pointed to the D.C. Circuit’s Sept. 25 ruling upholding Roman Sterlingov’s 150-month sentence, which found Washington was a proper venue because an undercover agent transacted with the mixer there.
The latest Bitcoin Fog argument centers on the legal question of where an alleged crime can be prosecuted when the defendant and the underlying software or service may operate across multiple jurisdictions.
The D.C. Circuit held that venue was proper in Washington for Sterlingov’s four convictions. For the money-laundering charges, the court relied in part on an undercover operation in which Special Agent Matthew Price conducted transactions with Bitcoin Fog from the District of Columbia. The court said the government had established that part of the charged conduct occurred there.
For the unlicensed money-transmission counts, the appeals court found sufficient evidence that Bitcoin Fog served customers in Washington. The court emphasized that a crime may be prosecuted where a part of the conduct constituting the offense occurred.
“Venue is proper in D.C. for all four Counts,” the appellate court ruled, rejecting Sterlingov’s challenge.
That ruling does not directly decide Storm’s case, but prosecutors say its venue analysis strengthens their position.
The DOJ described the precedent as “directly support[ing]” its argument that Tornado Cash activity occurring in Manhattan can establish venue in the Southern District of New York.
Storm’s defense has argued that a Tornado Cash transaction conducted by Shakeeb Ahmed from his Manhattan apartment was not enough to establish venue because the transaction did not further the conspiracy alleged by prosecutors.
The government takes a different view.
Prosecutors argue that even deposits that remain inside a crypto mixer for a relatively short period can contribute to the service’s operation by enlarging the pool of funds available for obfuscation. In their view, that activity can help make transactions more difficult to trace and therefore constitutes conduct relevant to the alleged conspiracy.
The government is using that theory to connect Ahmed’s Manhattan activity to its broader allegations against Storm.
The distinction matters because the appeals court’s Bitcoin Fog decision was based on specific evidence tying the charged conduct to Washington. In Sterlingov’s case, the court pointed to an undercover agent’s transactions conducted from a D.C. office and evidence that the mixer served customers in the district.
Storm’s lawyers, meanwhile, have argued that prosecutors must establish more than the mere existence of a user or transaction in New York to show that the alleged conspiracy actually occurred there.
The judge has yet to rule on the acquittal motion. Storm was convicted in August 2025 of conspiring to operate an unlicensed money-transmitting business, while the jury failed to reach unanimous verdicts on the money-laundering and sanctions-conspiracy charges.
The legal fight is unfolding against a rapidly changing U.S. policy backdrop for cryptocurrency mixers.
On Oct. 5, the Financial Crimes Enforcement Network announced that it was withdrawing a proposed rule that would have imposed special measures on convertible virtual currency mixing as a class of transactions of primary money-laundering concern. FinCEN said the withdrawal formed part of the administration’s broader deregulatory agenda and efforts to ensure digital-asset rules are fit for purpose.
Storm seized on the timing, arguing that the government’s policy position on crypto privacy tools appears increasingly difficult to reconcile with the criminal case against him.
His criticism comes as prosecutors continue to maintain that Storm’s alleged conduct involved criminal activity rather than merely the development of privacy-preserving software.
The Bitcoin Fog precedent therefore arrives at a particularly important moment. It gives prosecutors a fresh appellate decision to cite on venue, but it does not automatically establish that Storm’s case belongs in New York or resolve the separate questions surrounding his alleged intent.
For the defense, those distinctions remain critical.
The practical stakes are significant. If Failla rejects Storm’s acquittal request and the unresolved charges remain pending, the case is scheduled to return to trial in April 2027.
The Bitcoin Fog ruling could become part of the government’s effort to preserve New York as the venue for that proceeding, particularly on the money-laundering and money-transmission theories.
But the appellate decision involving Sterlingov was based on the evidence presented in that particular case. The D.C. Circuit did not rule on Tornado Cash, Storm or the facts surrounding the Manhattan transactions.
That means Failla will still have to determine whether the government’s evidence establishes the necessary connection between the alleged conspiracy and the Southern District of New York.
Storm has continued to push back publicly. In response to the government’s latest filing, he wrote on X that “The DOJ is still coming after me with everything it has.”
At the same time, the Treasury Department’s withdrawal of its proposed crypto-mixing rule gives the broader case an unusual policy backdrop. The regulatory retreat does not erase existing criminal laws or decide Storm’s pending motions, but it highlights the continuing tension between legitimate financial privacy, cryptocurrency innovation and law enforcement’s efforts to pursue alleged money laundering.
For now, prosecutors have gained another legal precedent to wield. Whether that precedent ultimately helps keep Storm’s remaining charges in New York — or materially changes the outcome of his acquittal bid — remains in Judge Failla’s hands.
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