Roman Sterlingov, a Russian-Swedish dual national convicted in March 2024 of running Bitcoin Fog, is now before the D.C. Circuit Court of Appeals in Case No. 24-3161. His legal team is challenging both the jurisdictional basis of his prosecution and the blockchain forensics evidence that helped put him in federal prison at Fort Dix for 12 years and 6 months. The appeal raises a question with reach far beyond one man's case: can a single U.S. jurisdiction claim authority over a borderless internet service simply because some of its users live there?

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What Bitcoin Fog Was, and What the Government Proved

Bitcoin Fog operated from October 2011 to April 2021, making it the longest-running cryptocurrency mixer on the darknet. A mixer, or tumbler, pools users' funds with other deposits and redistributes them to obscure transaction trails. The service was custodial, meaning it held and moved funds on users' behalf, and charged fees for the process. The Department of Justice alleged it processed more than 1.2 million BTC, worth roughly $400 million at the time of the transactions, with proceeds tied to narcotics, computer fraud, and identity theft. A jury convicted Sterlingov on four counts: money laundering conspiracy, sting money laundering, operating an unlicensed money transmitting business, and violations of the D.C. Money Transmitters Act. That fourth count is directly central to the jurisdictional argument at the heart of this appeal. He was also ordered to forfeit approximately $400 million.

The defense, however, points to a significant evidentiary gap. According to Sterlingov's legal team at Tor Ekeland Law: "No server logs, no BitcoinFog ledgers, no communications between Roman and anyone operating BitcoinFog, and no private keys linked to BitcoinFog [were] ever found in Roman's possession." The government's case rested heavily on blockchain analytics software from Chainalysis and an IP overlap analysis, which the defense describes as circumstantial and unreliable.

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The Forensics Fight

On September 22, 2025, blockchain analytics firm ChainArgos filed an amicus brief supporting the appeal, arguing that "many of the blockchain forensics techniques used at trial were fundamentally unscientific and should never have been presented before a jury." A separate ChainArgos analysis published in October 2025 identified a timeline problem: the prosecution's expert testified in 2023, but Chainalysis did not conduct an independent verification of its own clustering methodology until early 2025, more than two years after the trial ended. ChainArgos also identified addresses in the prosecution's evidence that fell outside Chainalysis's own Bitcoin Fog clusters, an internal contradiction the defense says undermines the government's entire forensic case. One prosecution witness claimed the methodology produced zero false positives; according to ChainArgos, citing Chainalysis's own documentation, Chainalysis itself acknowledges an error rate of approximately 0.15%.

The second major forensics challenge concerns the government's IP overlap analysis. Prosecutors argued that Sterlingov's personal IP address overlapped with administrator access to Bitcoin Fog accounts. The defense counters that the shared infrastructure in question could have been used by thousands of ordinary users, making the overlap far too imprecise to identify a single operator.

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The Jurisdiction Argument and Its Global Stakes

The D.C. charge rests on a 2019 court ruling that Bitcoin qualifies as "money" under D.C. financial services law. That ruling matters because it established the statutory predicate needed to charge Sterlingov under the D.C. Money Transmitters Act, a local registration requirement, rather than solely under federal Bank Secrecy Act obligations. The DOJ's theory extends from there: any operator of a globally accessible crypto service that touches D.C. users must register as a money transmitter in the District. The appeals panel questioned whether D.C.'s Money Transmitters Act can lawfully reach a service with no fixed physical location, run by a foreign national from abroad.

If the D.C. Circuit upholds that theory, the implications travel far beyond U.S. borders. Every crypto exchange or privacy tool accessible to D.C. residents, regardless of where it is incorporated or who built it, would theoretically fall under D.C. law. Applied consistently, the same logic gives any jurisdiction in the world a claim over any internet-based financial service its residents can access.

For developers and exchanges operating in India and Nigeria, this is not an abstract concern. Across much of the Global South, privacy tools serve populations with limited access to formal banking, and remittance corridors spanning Africa, Asia, and the Middle East depend on low-cost transfer mechanisms that overlap with precisely the technology under scrutiny here. For developers working in financially excluded regions, the stakes are direct rather than theoretical. India's Financial Intelligence Unit banned privacy coins and crypto mixers in January 2026 and has already fined Bybit roughly $1.1 million (approximately ₹9.27 crore) for AML non-compliance, asserting authority over a foreign-incorporated platform serving Indian users. Nigeria's SEC launched an AML/CFT/CPF supervision pilot under its 2025 Investments and Securities Act and detained Binance executives in 2024 over alleged violations involving the naira. Both regulators are building enforcement frameworks that echo the DOJ's "accessible equals regulated" approach.

The implications extend across the African continent more broadly. South Africa has aligned its crypto oversight with FATF Travel Rule requirements, and Mauritius has moved to bring virtual asset service providers under its VAITOS Act framework. Regulators from Pretoria to Port Louis are watching whether the D.C. Circuit's ruling will supply a tested legal template for asserting domestic authority over globally accessible services. A favorable ruling for the government in the Sterlingov appeal would hand those regulators exactly that.

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A Shifting DOJ, an Unchanged Prosecution

The appeal unfolds against an awkward backdrop. On April 7, 2025, Deputy Attorney General Todd Blanche issued a memo stating that the DOJ "is not a digital assets regulator and will no longer pursue litigation or enforcement actions that have the effect of superimposing regulatory frameworks on digital assets." The Sterlingov prosecution, built on exactly that premise, predates the memo and remains active.

The Bitcoin Fog case is not the only stress test for the DOJ's mixer enforcement theory. Samourai Wallet co-founders Keonne Rodriguez and William Lonergan Hill were both convicted on unlicensed money transmitting charges: Rodriguez pleaded guilty and was sentenced to five years in late 2025, while Hill received a four-year sentence. The Samourai service was alleged to have facilitated over $237 million in criminal proceeds, a figure that provides comparative scale alongside the $400 million at the center of the Bitcoin Fog case. Roman Storm of Tornado Cash was convicted on the unlicensed money transmitting charge in Manhattan.

The D.C. Circuit has not announced a ruling date. Whatever it decides, the case is already functioning as a reference point for regulators from New Delhi to Lagos and Johannesburg who are watching to see how broadly a domestic financial services law can reach across the internet.