Tornado Cash & the Developer Cases

Federal prosecutors told Judge Katherine Polk Failla (SDNY) in a Monday letter that the D.C. Circuit's Sept. 25 ruling affirming Bitcoin Fog founder Roman Sterlingov's conviction and 150-month sentence supports trying Roman Storm in Manhattan. They argue Tornado Cash user Shakeeb Ahmed's deposit, which stayed in the pools "a couple days" while he accessed the service from his Manhattan apartment, is comparable to the roughly $250 in Bitcoin an agent deposited in the Bitcoin Fog case. Storm's acquittal motion, argued in April, is still undecided, and he was convicted in August 2025 of conspiring to operate an unlicensed money transmitting business.

CryptoRank, republishing CryptoSlate, reports that prosecutors' Oct. 5 letter asks Judge Failla to reject Roman Storm's venue challenge on the money-laundering and money-transmission conspiracy counts, citing the D.C. Circuit's Sept. 25 Sterlingov (Bitcoin Fog) decision. Storm's retrial is set for April 26, 2027 under an Aug. 25, 2026 order, and his August 2025 conviction on one money-transmission conspiracy count carries a five-year statutory maximum. The filing came as FinCEN withdrew its 2023 mixer-reporting proposal, while DOJ memos from April and Aug. 2025 preserve section 1960 prosecutions for funds known to be criminal.

US Finance Times reports that a Tuesday Federal Register notice signed by FinCEN Deputy Director Jimmy L. Kirby withdraws the 2023 proposal to treat international crypto mixing as a Section 311 "primary money laundering concern," along with a separate December 2020 proposal on unhosted wallet records for amounts over $3,000. FinCEN said the "expansive definition of CVC mixing" risked a chilling effect on legitimate activity. Within a day, SDNY prosecutors advanced new arguments to keep their case against Roman Storm alive, which Storm pointed to as a contrast.