BlockBeats News, May 13: The US Court of Appeals for the District of Columbia Circuit heard oral arguments on Tuesday in the appeal of the conviction of Roman Sterlingov, operator of the Bitcoin mixing service Bitcoin Fog. This case tests a core theory of the US Department of Justice — that global internet encryption services, if they serve US users and facilitate cross-border fund transfers, fall under US money transmission laws, even if the service is primarily operated overseas.

The defense team's lawyer argued that the US government, through undercover agents conducting a small number of transactions, "artificially created" jurisdiction and questioned whether this standard would subject any website to US enforcement. The prosecution emphasized that Bitcoin Fog intentionally served international (including US) users and must comply with US regulations. The judges also raised questions about the reliability of the FBI's use of "IP overlap" analysis to link Sterlingov to the service, stating that it lacked scientific validation. The outcome of this case will impact similar prosecutions of privacy tool developers like Tornado Cash and Samourai Wallet, as well as the US's cross-border enforcement boundaries regarding cryptocurrency services.