The prosecution alleges that more than a million bitcoins passed through the service for trafficking in drugs and child exploitation material

Bitcoin Fog crypto mixer founder faces 50 years in prison for money laundering

13.03.2024 - 10:05

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3 min

What’s new? A jury in Washington, D.C., has found the founder of the crypto mixer Bitcoin Fog, Roman Sterlingov, guilty of laundering criminal proceeds. During the investigation, it was proven that Sterlingov managed the service from October 2011 to April 2021, during which time he processed transactions worth 1,2 million BTC or $400 million at the exchange rates at the time they were made. The bulk of the funds came from darknet marketplaces and involved drug trafficking, identity theft, ransomware, and child sexual abuse material.

The DOJ’s press release

What else is known? Roman Sterlingov, a 35-year-old Russian-Swedish national, was found guilty of all charges, including conspiracy to commit money laundering, laundering illegal funds, operating an unlicensed money transfer business, and violating the District of Columbia’s law on the operation of money transfer companies.

The jury also approved the forfeiture of assets previously seized by law enforcement, including 1354 bitcoins stored in a wallet on Bitcoin Fog, as well as $349 625 and a number of cryptocurrencies, including bitcoin, Ethereum, Monero, and Stellar, stored in a wallet on the US crypto exchange Kraken.

At launch, Sterling promoted Bitcoin Fog as a tool for anonymizing bitcoin transactions and evading law enforcement. Bitcoin Fog’s largest users were the darknet marketplaces Agora, Silk Road, Silk Road 2.0, Evolution, and AlphaBay, with Sterlingov earning millions of dollars in fees. As the jury found, Sterlingov’s fund-mixing activities qualify as an illegal money transfer and money laundering service under federal law.

“Darknet criminals should know by now that operations like Bitcoin Fog cannot provide the anonymity for cryptocurrency transactions that they claim they can. This conviction demonstrates that the United States can and will combat the use of technology to carry out crimes in cyberspace,” said Attorney Matthew Graves.

The verdict and asset forfeiture judgment is scheduled to be announced on July 15 of this year. The maximum penalty for all charges is 50 years in prison. Sterlingov was arrested on April 27, 2021, at Los Angeles International Airport and has remained in custody since then.

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Last August, US authorities accused the founders of sanction-listed crypto mixer Tornado Cash, Roman Storm and Roman Semenov, of laundering $1 billion, including that sent by hackers from North Korea. Storm was detained in the US and later released on bail, Semenov remains at large. In addition, Tornado Cash developer Alexey Pertsev was previously detained in the Netherlands, where he is awaiting the start of the trial.

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