On October 5, 2026, federal prosecutors filed docket 305 in United States v. Roman Storm, case 1:23-cr-00430-KPF. The three-page letter asks Judge Katherine Polk Failla to treat a recent Bitcoin Fog appeals decision as supplemental authority for venue on Counts One and Two.
The government points to United States v. Sterlingov, decided by the D.C. Circuit on September 25, 2026. According to the filing, the appeals court found venue proper for a money laundering conspiracy because transfers to and from Bitcoin Fog furthered the mixer’s ability to launder funds for all users. The appeals court also found venue proper for an unlicensed money transmitting charge because Bitcoin Fog had served customers in the district. Prosecutors call the holdings well reasoned and consistent with Second Circuit precedent. They say both rulings bear directly on Storm’s case.
Prosecutors say those holdings map onto the Tornado Cash evidence presented at Storm’s trial. Their argument centers on one user’s activity in Manhattan and on how deposits affect a mixer’s anonymity set.
The government’s venue theory
The filing identifies Shakeeb Ahmed as a Tornado Cash user who was in the Southern District of New York when he transacted with the protocol. Trial witness Justin Bram testified that “the larger the anonymity set, the harder it would be to identify where funds came from and where they’re going.” Prosecutors use that testimony to argue that deposits and withdrawals by Ahmed and other users made the pools more effective for concealment.
Storm’s defense had argued that Ahmed’s funds stayed in Tornado Cash too briefly to materially further the alleged conspiracy. The government answers with the facts cited in Sterlingov. That depositor made two small deposits, withdrew almost all of the first the next day, and withdrew the second within three days. The D.C. Circuit still found sufficient evidence for a jury to conclude that the transfers furthered Bitcoin Fog’s ability to launder funds for all users.
The comparison is close on duration. Ahmed testified that his deposit remained in Tornado Cash for “a couple days.” Prosecutors therefore say Sterlingov directly supports venue on Count One.
The filing also supplies scale for the precedent it invokes. About $400 million of cryptocurrency flowed through Bitcoin Fog, while the first in-district deposit was about $250. A second deposit was approximately 0.0117 Bitcoin, worth about $97 at the cited closing price. The government’s point is that small, short-lived in-district transactions were enough to support venue in that case.
Why Count Two is different
The government describes Sterlingov as even more persuasive for Count Two. The appeals court applied the venue requirements for a substantive unlicensed money transmitting offense and concluded that serving customers in the district was enough. Its examples included receiving funds from and issuing funds to a person in Washington, D.C.
Ahmed testified that he accessed Tornado Cash “in [his] apartment in Manhattan.” Prosecutors say that testimony established that Tornado Cash served customers in the Southern District of New York. The court has not adopted that conclusion in docket 305. The letter is the prosecution’s request that Failla find venue proper.
For privacy-protocol users and developers, the practical issue is geographic. Under the government’s theory, a customer’s use of a mixer from one apartment can help establish venue for charges against the service’s developer. The filing does not propose a minimum transaction size or holding period. It instead compares Ahmed’s use with transactions that lasted from one to three days in Sterlingov.
The prosecutors acknowledge limited Second Circuit guidance. They write that its law is “nearly silent” on materiality for venue in conspiracy cases. The letter cites United States v. Royer, where a handful of subscribers in the district supported venue for a stock-picking website with hundreds of subscribers. Prosecutors read that precedent to require a relationship between the in-district acts and the conspiracy’s object, rather than a larger quantitative threshold.
A separate FinCEN withdrawal
The venue filing arrived as FinCEN changed course on a separate regulatory proposal. In a notice scheduled for publication on October 6, FinCEN withdrew its finding that international convertible virtual currency mixing is a class of transactions of primary money laundering concern. It also withdrew the related proposed rule under Section 311 of the USA PATRIOT Act.
The 2023 proposal would have required covered financial institutions to report specified information when they knew, suspected, or had reason to suspect that a transaction involved mixing outside the United States. The proposed reports included the amount and type of cryptocurrency, the mixer used, wallet addresses, transaction hashes, transaction dates, IP addresses, and a narrative description. Covered institutions also would have kept customer identity records.
FinCEN said the withdrawal was informed by comments that its broad definition could chill legitimate activity and impose a large reporting burden. The agency also said illicit actors continue to use mixers and that it will monitor mixer activity for signs of money laundering, terrorist financing, or other illicit finance.
Storm responded on X that the DOJ was still pursuing his case while Treasury had cited a “chilling effect on legitimate activity.” His post also quoted the prosecution’s April 9, 2026 argument that legitimate Tornado Cash transactions became illegitimate because they facilitated alleged criminal ends.
The two government actions address different legal questions. FinCEN withdrew a proposed reporting rule, while prosecutors asked a federal judge to apply an appellate venue analysis to Storm’s criminal case. The open issue is whether Failla will accept the comparison between Ahmed’s Manhattan transactions and the in-district Bitcoin Fog transactions described in Sterlingov.
