Federal prosecutors in New York are citing a recent Bitcoin Fog appeals ruling to oppose Tornado Cash co-founder Roman Storm's acquittal motion, arguing that a Manhattan customer's transactions establish proper venue. The legal push highlights a growing tension in Washington's crypto posture: while the Financial Crimes Enforcement Network is withdrawing proposed regulatory crackdowns on mixers to protect legitimate privacy, the Department of Justice continues to aggressively prosecute developers.
Roman Storm's acquittal motion
- ▪Federal prosecutors in the Southern District of New York cited a September 25, 2026 appeals court ruling in the Bitcoin Fog case to oppose Tornado Cash developer Roman Storm's acquittal motion.
- ▪Roman Storm's September 2025 acquittal motion argued that prosecutors failed to prove he intended to help criminals misuse Tornado Cash or that New York transactions advanced the alleged conspiracy.
- ▪U.S. District Judge Katherine Polk Failla heard oral arguments on Roman Storm's September 2025 acquittal motion in April 2026 and has not yet ruled.
Venue arguments involving Shakeeb Ahmed
- ▪Prosecutors argued that even short-lived deposits by Shakeeb Ahmed benefited Tornado Cash by increasing the transaction pool used to obscure the movement of funds.
- ▪Prosecutors argued that Manhattan resident Shakeeb Ahmed's use of Tornado Cash established venue in the Southern District of New York for Roman Storm's conspiracy charges.
Bitcoin Fog appeals court ruling
- ▪The U.S. Court of Appeals for the D.C. Circuit ruled in United States v. Sterlingov that transfers to and from Bitcoin Fog furthered the mixer's ability to launder the funds of all users.
- ▪The U.S. Court of Appeals for the D.C. Circuit upheld Bitcoin Fog operator Roman Sterlingov's convictions and 12.5-year sentence, ruling Washington, D.C., was a proper venue because an undercover agent completed transactions there and the mixer served customers.
Roman Storm's trial and retrial
- ▪A jury convicted Roman Storm in August 2025 of conspiring to operate an unlicensed money-transmitting business but deadlocked on money-laundering and sanctions-conspiracy charges.
- ▪A retrial for Roman Storm on the deadlocked money-laundering and sanctions-conspiracy charges is scheduled for April 26, 2027, if those charges remain pending.
FinCEN withdraws regulatory proposals
- ▪The Financial Crimes Enforcement Network withdrew a December 2020 proposal that would require banks and money services businesses to verify and retain identities for transactions exceeding $3,000 involving unhosted wallets.
- ▪The Financial Crimes Enforcement Network withdrew its 2023 proposal to define international convertible virtual currency mixing as a primary money laundering concern under the USA PATRIOT Act.
- ▪The Financial Crimes Enforcement Network stated it withdrew the proposals because the expansive definition of mixing risked a chilling effect on legitimate activity and imposed heavy reporting loads.
Debatable claims
- ▪The US should not prosecute developers for the illicit use of decentralized software
- ▪Broad regulatory reporting requirements for cryptocurrency mixers do more harm than good
Story comments
Loading comments…